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Estate of Solomon Katz 








Translated from the German by 














Different Views as to Money Capital 21 

The Need of Capital for War 25 

The Means of satisfying the Need of Capital for War 29 

Beginnings and Foundations of Public Credit 32 

Loans of Princes 35 
The practical importance of the Ecclesiastical Doctrine of 

Usury. Interest and Kent 42 

Loans of the Cities 44 

The Lenders of Money Capital 48 

The Beginnings of Stock Exchanges 54 . 
Review as to the conditions in regard to Public Credit at the 

close of the Middle Ages 58 



OF JAKOB n (1525) 64 

Origin and Beginnings 64 

Jakob II 65 

New Ways of Business 65 

Dealings with the Emperor Maximilian I 67 

The Fugger and the Reformation 72 

The Fugger and the Election of Charles V as Emperor 74 

Charles V and Jakob Fugger 79 

Spain 81 

Naples 82 

Jakob Fugger's End and his Importance 83 


Anton's Caution in the Early Years 86 



Conservative Attitude of the Tagger till 1530 89 

The Hapsburgs and the Fugger in 1530 90 

The Fugger Balance Sheets of 1533 and 1536 94 

The Following Period till 1546 95 

The Period of the War of Schmalkalden 97 

Wish of the Fugger to retire from Business 101 

State of the Business in 1546 101 

New Business. Seeds of decay 105 

Charles V and Anton Fugger, 1552 106 

Anton Fugger and the Antwerp Bourse 109 

The Fugger and the Financial Crisis of 1557 114 

Anton Fugger's End and his Importance 117 
The Story of the Burning of the Promissory Notes of Charles V 118 



The Third Generation. Hans Jakob Fugger 119 

State of the Business in 1563 120 

Marx Fugger and Brothers 124 

The Fugger and the Spanish Financial Crisis of 1575 125 

The Balance Sheet of 1577 128 

Final Period of the Fugger's Business Activities 129 



The Meuting 133 

Mining and Smelting 134 
The Emperor Maximilian I and the South German Merchants 134 

The Welser 137 

Beginnings 137 

Development up to the Year 1517 138 

The Nuremberg Welser 140 

The Welser of Augsburg under Bartholomew Welser 142 

The Time of the War of Schmalkalden 144 

Later Period until the Crisis of 1557 147 

Decay and Final Catastrophe 149 

The Hochstetter 151 

The Herwart 156 

Hieronymus Seiler 158 

Sebastian Neidhart and his Heirs 158 


The Manlich 161 

The Adler 162 

The Hem 162 

The Hang and their Kinsmen 163 

Jakob Herbrot 166 

The Tucher 167 

The Imhof 168 

Other South German Business Houses 172 
The Great South German Financiers in Antwerp and Lyons 174 

Wolff Haller von HaUerstein 175 

Lazarus Tucher 177 

Other Antwerp Financiers of South German Origin 183 

Hans Kleberg, 'the Good German' in Lyons 184 

Financiers of South Germany in Lyons at a later time 187 

North German Capitalists 189 



General Survey 193 

The Florentines in Rome and Naples 194 
The Final Period of the Medici in the Netherlands and England 196 

The Frescobaldi and the Gualterotti 198 
The End of Florentine Financial Business in the Netherlands 

and England 201 

The Florentines in France 202 

The Period 1494-1512 204 

Jacopo Salviati and Filippo Strozzi, 1512-1527 206 

The Period 1527-1530 208 

The Strozzi after 1530 212 
Other Developments of Florentine Business in France until the 

Death of Henry II (1559) 216 

The Period of Charles IX and Henry III 218 


Agostini Chigi of Siena 220 

Gaspar Ducci of Pistoia 222 

The Bonvisi of Lucca 226 

Other Merchants from Lucca 227 

The Affaitadi of Cremona 229 

The Last Italian Financiers in France 230 




The Rise of Antwerp 233 

The Importance of Antwerp: General Survey 234 

Antwerp Fairs and Bourse 236 

Speculation in Antwerp 239 

The Beginnings of Forward Dealing 243 

Bill Transactions in Antwerp 244 

Antwerp Deposit Business 246 

General Survey of Antwerp: Financial Business 248 
Financial Agents of the Court of the Netherlands and the 

Princely Agents in Antwerp. 250 

Sir Thomas Gresham 252 
Chronicle of the Antwerp Finance Business until the Year 

1542 255 

The Period 1542 to 1551 266 

The Period 1551 to 1557 272 



The Rise of Lyons 281 

The Importance of Lyons: General Survey 282 

Fairs and Bourse in Lyons 284 

Forms of Capital Transactions in Lyons 287 

The Beginnings of the Loans of the French Crown 288 

The Work of the Cardinal de Tournon 291 

The Period 1542 to 1547 292 

The Period 1547 to 1551 297 

The Period 1551 to 1557 300 



External Development of Antwerp and Lyons 307 

Fairs and Bourses 308 



The Forms of Commercial Transactions in Capital 311 
The Importance of the Public Credit of the World Bourses 312 

The Commonalty of the Bourse and Bourse Opinion 315 

Bourse Opinion and Commercial Transactions in Capital 318 

The 'ditta di borsa' 318 

Bourse Opinion and Public Credit 319 

Bourse Prices and Bourse Kate of Interest 322 

Speculation and Arbitrage in Capital Transactions 325 

The Mobilization of Capital on Loan 328 

Final Conclusions 332 



Spain 334 

France 337 

England in the Seventeenth Century 345 

The Netherlands 349 

England in the Eighteenth Century 352 


Amsterdam 357 

Paris in the Sixteenth and Seventeenth Century 362 

London until the Revolution of 1688 364 

London after the Revolution of 1688 364 

Paris in the Eighteenth Century 368 

The German Stock Exchanges 370 



npHE rapidly growing interest in economic and social history has 
J. produced a general desire to know more of the manner in which 
the economic development of Europe has been interpreted by scholars 
of other nations. The aim of the Publishers is to meet that de- 
mand. With this object, translations of works on economic and social 
history by distinguished foreign authorities, which are likely to be of 
interest to English students, will from time to time be produced. The 
opening volumes of the series are The Industrial Revolution in the 
Eighteenth Century, by Professor Paul Mantoux, and Capital and Finance 
in the Age of the Renaissance. A Study of the luggers and their Con- 
nections, by Dr. Richard Ehrenberg. The books of Professor Mantoux 
and Dr. Ehrenberg hold a deservedly high place in economic and his- 
torical literature, and it is believed that the appearance of English 
versions of them will be generally welcomed. They will be followed in 
due course by translations of other foreign works, throwing light on 
different aspects of economic and social history. 


'-pHE book of Dr. Richard Ehrenberg, Das Zeitalter der Fugger, 
J. has long been known and valued by English, students, and all 
who are interested in a critical period in the economic history of 
Europe will be glad that it has been made more accessible in the 
excellent translation of Mrs. Lucas. Certain chapters, of somewhat 
less general interest than the remainder, have been omitted. But the 
reader will find in the following pages a fuller study than is elsewhere 
available in English of the financial developments which were the pre- 
lude to the industrial expansion of the seventeenth and eighteenth 

Much attention has been devoted in recent years by continental 
scholars to the investigation of the earlier phases of capitalist enter- 
prise. The subject has been approached along several different paths 
and with varying conclusions. It is clear, however, that the mobiliz- 
ation of financial resources on a greater scale than in the past, which 
took place in the age of the Renaissance, is a phenomenon which lies 
near the centre of it, and it is this aspect of the problem which forms 
the theme of Dr. Ehrenberg's book. Though he selects for special 
examination the business of the Fugger, who were the greatest finan- 
ciers of the period, his work is much more than a study of the activities 
of a single firm, however important. It is an attempt to show the 
causes which produced the increased demand for capital in the six- 
teenth century, the sources from which capital was drawn, and the 
financial machinery through which it was made available for com- 
mercial ventures, for industry and for the needs of States. 

The Public Finance of the sixteenth century is a study which is 
largely pathological. There were degrees in the incompetence and 
immorality of Governments, but the practice of all was bad; and, if 
Elizabeth, with the aid of Gresham, had achieved by the middle of her 
reign a reputation which stood her in good stead as a borrower, it was 
due, it may be suspected, less to the virtue of the English Government 
than to the vices of its neighbours. The causes of the impasse lay 
deeper than the personal shortcomings of statesmen and their advisers. 
The essence of the difficulty consisted in the fact that an antiquated 
engine was being used to draw a load for which it had not been designed. 
The incompatibility of mediaeval systems of finance with the new 
military and administrative methods was making itself increasingly 
felt. The interest of Dr. Ehrenberg's introductory pages consists partly 
in the account which they give of the financial aspects of the recurrent 
political breakdowns, and of the attempts of Governments to draw 
upon the resources of the money-market in order to avert them. 


The part played by the financier in the commercial and industrial 
life of the age was more fruitful and constructive. A steady flow of 
capital was needed to finance the movement of the produce handled 
on the world-market, such as the eastern spice-crop, copper, alum, the 
precious metals, and the cloth shipped by the English Merchant Adven- 
turers. The supply of it came from productive enterprises, such as the 
silver and copper mines of the Fugger in the Tyrol and Hungary, the 
profits of trading ventures, successful investments and speculations 
on the part of the merchants themselves, and to a less extent - 
since the habit of lending money at call had already gone some way 
on the continent - from savings invested by the general public. 
Dr. Ehrenberg's account of the personnel and organization of the 
Antwerp money-market shows the machinery through which the finan- 
cial resources of the age were mobilized. Its essence, as his description 
shows, was internationalism, freedom for every capitalist to undertake 
every transaction within his means, a unity which had as its symptom 
the movement of all the principal markets in sympathy with each 
other, and as its effect the mobilization of large resources at the strate- 
gic points of commerce. 

The world of international finance described by Dr. Ehrenberg 
stood in intonate relation, therefore, both with the political and with 
the economic problems of the period. Its significance for the future 
was profound. Dr. Ehrenberg's concluding pages describe shortly the 
principal landmarks in the financial history of the seventeenth century. 
The story of English banking in the century before the foundation 
of the Bank of England contains several phases which are still obscure, 
and not every one will agree with his interpretation of it. But if the 
causes that produced the sensational changes which took place after 
the Revolution are to be understood, it is necessary that the English 
developments should be set in relation to their continental background. 
It ia not the least of the merits of Dr. Ehrenberg's book that it assists 
the English reader to see the economic evolution of his own country as 
part of a general European movement. 


y'-lERTAIN sections of Dr. Bichard Ehrenberg's book have been 
V>4omitted in translation. They are : 

Vol I. Chapter IV (The Geonese Spaniards and Netherlanders). 
Chapter V (The Importance of the Financiers of the Sixteenth 

Vol II. Section III, entitled : The Time of the International Financial 


The references contained in Dr. Ehrenberg's copious notes have 
been given. A note has been added on the Currencies mentioned in 
the text. 

H. M. L. 


The gulden, according to the Imperial edict of 1524, contained 37| 
English grains of fine gold (Del Mar, p. 339). The revolutionary 
government in Holland coined 'guilders' or florins of 160J grains fine 
silver (/&., p. 369). 

The Lime Tournois in 1200 designated 98 grammes of fine silver, by 
1600 it had fallen to 11 grammes (D'Avenel, Vol. I, p. 62). In the 
middle of the sixteenth century it was equal to of the Livre d' Artois 
or Cayolus gulden. 

The Flemish Pound or Livre de gros de Flandres contained 20 scheUing 
=240 grooten. 

The Carolus gulden, also called the Livre d' Artois or florin de Brabant, 
was a Netherlands silver coin established by the law of February 22, 
1542 (Shaw, p. 345). It was equal to 40 gr. or 20 stivers. Hence 1 
pound Flemish=6 Carolus gulden. 

The ducat was equal to 42 or 43 stivers and thus was rather more than 
2 Carolus Gulden and rather less than J of a pound Flemish. 
The Spanish ducat was worth 375 maravedi. 

The Rhenish florin was a gold gulden. 7 fl. Eh. =10 Carolus gulden == 
about 5 ducats. 

The Crown or Sew was about $ of a ducat and in the middle of the six- 
teenth century was worth rather more than 5 shillings English. 




T/1EWS on Money Capital. Pecunia pecuniam non parere potest. 
* Money is essentially unproductive. Anyone, therefore, who de- 
mands fruits from it, sins not only against positive commandments of 
divine and secular law, but also against the nature of things. A man 
profoundly learned in this commercial law of the Middle Ages formu- 
lates in these words the first principle which for many centuries ruled 
undisputed in theory and even attempted to bring practice under its 
sway. 1 

This ecclesiastical view of money capital had its origin in the leading 
idea of Christianity directed against the materialism of antiquity - the 
idea that earthly things were only valuable in so far as they served as 
preparation for the life to come. It was based on a moral precept from 
the Bible, and a saying of Aristotle, which apparently was only the state- 
ment of an ideal, but which interpreted as a principle, appeared to deny 
productivity to money. 

As the two highest spiritual authorities of the Middle Ages had both 
pronounced in the same sense, it was practically impossible to contradict 
the theory. On the other hand, the circumstances of ordinary hie could 
not be made to harmonize with this view. So long as money was not 
yet used on a large scale as a medium of exchange, but served chiefly as 
a measure of value and so long as payments were chiefly made in kind, 
interest on money capital was comparatively rare. As soon, however, 
as the economic life of the European peoples outgrew this early stage of 
cultural development, especially since the time of the Crusades, the 
ecclesiastical ideal was thrust more and more into the background until 
finally even the doctrine changed. 

The new doctrine no longer made moral claims, but for the first time 
since the classical period tried to treat economic facts from an economic 
point of view. Since Adam Smith it has borne the name of the 'mer- 
cantile' system. Like every other theory which has proved important in 
practice, it is the product of various interests and tendencies. Public 
opinion in the mass was chiefly influenced by the enormous production 
of precious metals in Spanish America. The news of these fabulous 
treasures which was spread abroad, not without the help of Spanish 
financiers, had a deep and lasting influence on the imagination of the 
masses; the more so as for some considerable time the power of Spain 
was actually strengthened by the American silver. It also influenced 

i Endenmnn, Studien in tier romanischrtomonist. WirOuchaftt-und Xechtslekre, 
1874-83, H. 11. 


many of the second- or third-rate writers, who after the devastating wars 
of the sixteenth and seventeenth centuries tried more or less systematic- 
ally to develop their views of the State and economics. They spread the 
exaggerations of the mercantile doctrine, the over-estimation of the 
power of money, which Adam Smith fought against. 

On the other hand, genuine mercantilism, important alike on the 
practical and scientific side, had arisen much earlier. It was chiefly the 
result of the experience in economic matters collected throughout many 
centuries by the mediaeval cities. Since the end of the Middle Ages, 
this experience had been utilized by princes and statesmen in order 
to extend and establish their power and to form real States. It had 
also been used by writers of the first rank in order to support the 
princes at their work by advice which already bore the stamp of true 

With seeming suddenness one principle becomes prominent at this 
time which expresses a new view of the essence and significance of money 
capital. This principle runs Tecunia nervus belli' (money is the sinews 
of war). 

It is no theory but a principle based on experience. It was not 
framed in conscious opposition to the mediaeval doctrine, and it holds 
no logical contradiction of it. It contents itself with a brief statement of 
an often observed fact. But it brings before us one of the most import- 
ant consequences of the great spiritual revolution we call the 'Benais- 

The Eenaissance means everywhere, but more especially in regard to 
social and civic life, a return in this last resort to Nature, to what is 
actually before us, here in this instance to human nature, which is once 
again regarded as a datum. 

The Catholic Church of the Middle Ages with its effort to bring up 
men by its doctrine to the highest morality had itself long sunk to an 
outer hypocrisy and an inner moral corruption, without, however, re- 
nouncing its ideal claims on human nature. The Eenaissance, on the 
other hand, gave up the idea of making men more noble and therefore 
directed its efforts all the more to bridling and ruling them. 

The statecraft of the Eenaissance did not, like the Ecclesiastical 
doctrine of the Middle Ages, erect a powerful structure of dogma 
clamped together with iron logic but resting on feet of clay. It preferred 
to embody its observations in short sentences. It turned to Classical 
times originally, not from a fondness to philosophy or archaeology, but 
because it needed the classics. Where else could the young science of 
experience find authority to rival the wisdom of the schoolmen sancti- 
fied as it was by age and faith? Hence at first the passionate search for 
the remains of a vanished civilization, a search which degenerated all 


too soon with a meaningless heaping up of dead authorities and a learned 

The Renaissance, properly speaking, was only the high-water mark of 
the development, which had begun long before and which rose with 
increasing speed in the last centuries of the Middle Ages. So the old 
principle Tecunia nervus belli' did not reappear so suddenly after all. 1 
Originating in this form in Aceio, it appears occasionally in mediaeval 
literature. When, however, thousands of fresh experiences had demon- 
strated its truth, the statecraft of the Renaissance made it the central 
point of its economic discussion, and this came to pass first of all in 
that country and that city, where such experiences were the most abun- 
dantly forthcoming. 

The Italians, and more especially the Florentines, towards the end of 
the Middle Ages could look back on a practice in handling money capital 
extending over more than three hundred years. They knew that money 
had become an indispensable weapon for the attainment of political 
power. They had had this fact perpetually before their eyes for hun- 
dreds of years, and each generation had handed it down with a steadily 
growing store of practical experience. Masters of language now gave it 
the stamp of universality, and with the help of the newly rediscovered 
classical learning made it the common property of the upper classes 
throughout Europe. 

Both for theory and for legislation, however, the ban against interest 
on capital remained for a timeunattacked and left to a gradualand spon- 
taneous dissolution. It progressively lost influence on practical life, the 
experiencesof which wereelsewhere formulated into a scientific clearness. 

Among Florentine statesmen and learned men of the fifteenth cen- 
tury the saying Tecunia nervus belli' had certainly long been current, 
before Machiavelli took it for his subject of a short but important 
polemic. 2 In opposition to the general view he there lays it down that 
money is not the sinews of war, that it is not sufficient of itself to obtain 
good soldiers; that, on the other hand, with soldiers money can often be 

1 Davanzati, Lezione deUe monete in der Auag. bei Argelotua IV. 164, Note 1; 
Lipsius, PoW. *. do. doctr. (1596) IV. 9. V. 6; Biiohmann, GeflugeUe Worte. 16. 
Aufl. (1889) p. 339 ff. Sansovino, Concetti politic* (No. 388): D nutrimento dell' 
esaercito senz' alcun dubbio e il danaro. Qnesto da misura ad ogni oosa e si con- 
verte in ogni cosa. Perd disse quel savio antioo, ch'i capitani, i soldati, I'arme, i 
cavaffl e gli stromenti, 1'artiglierie, ma non i danari, erano simili, ad un corpo, 
che havesse testa, braocia, collo, petto, gambe e piedi, ma non ventre; perohe si 
come il ventre da nutrimento al corpo, eosi i danari danno sostanza all' esseroito, 
e quel Be di Sparta gli chiamd nerro della guerra; perohe si come i nervi danno il 
moto al corpo, cosi lo danno i danari all' esseroito. 

Dtscorw sopra le deche di Tito Livio IL 10. 


The fact that this principle was accepted in Machiavelli's circle as an 
axiom was sufficient to rouse opposition in his inventive mind, but this 
opposition had a much deeper root. Machiavelli hated the mercenaries 
and was enthusiastic for a militia system with extensive liability for 
service. He introduced this into Florence, without, however, much 
success. His friend, the great historian Francesco Guicciardini, who, 
though far from his equal in intellect, dialectic and political farsighted- 
ness, was far superior to him in practical insight into immediate political 
necessity, contradicted him here as he did elsewhere. 1 At present, he 
says, it is easier to get soldiers with money than money with soldiers. 
On this head Guicciardini knew his own times better than Machiavelli 
did. The saying Tecunia nervus belli' had in the time of the Kenais- 
sance already received the popular form which two hundred years later 
was usually ascribed to Montecuccoli. A trustworthy authority gives 
the story as follows: a 

When King Louis XII, in the year 1499, formed the project of taking 
the Dukedom of Milan, to which he thought he had a claim, he one day 
asked in the State Council of the Condottiere Gian Giacomo do 
Trivulzio, a Milanese who had entered his service, what preparations 
were necessary for this great enterprise - Trivulzio, who as a Condottiere 
had the most exact information on this head, answered him, 'Most 
Gracious King, three things must be ready: money, money, and once 
again, money.' Here this saying has the character of a jest springing 
spontaneously from past experience. Montecuccoli, on the other hand, 
two hundred years later, in his memoirs, 3 joins this saying rather 
heavily to the well-known apothegms of the ancients, and calls money 
'the tool of tools' and continues, 'What wonder hath brought forth the 
marvellous effects of which history is full? Hereon a certain man, being 
asked what were the things necessary for making war, replied that there 
were three: Money, Money, Money.' Here the empirical doctrine is 
turned once more into a kind of dogma with a claim to a universal appli- 
cation. On the other hand, a well-known military writer of the present 
states it in a strictly limited form - 'A full war chest may be worth an 
army corps, financial talent on the part of a leader in the field may be 
worth a good general.' * 

The first great statesmen and publicists of the Eenaissance did not 
wish to pursue either economics or finance. They spoke of money as the 
sinews of war, because money was more important for war than for any 

1 Opere inedite L 61. 

'Lodovico Guicciardini, L'hore de recreafome, in the German translation of 
Daniel Federmann von Memmingen, Basel, 1575. 
Monteoucooli, Lib. 1, cap. 2, tit. 5: del danaro. 
Von der Goltz, Das FoMr in Waffen, p. 465. 


other process that came within their purview. Within a few generations, 
however, their observations were generalized. Botero designates war as 
the most important eventuality for which a prince must keep money in 
reserve; and Bodinus Besold, Ammirato, and other publicists of the 
same epoch, use the same language. They are followed by the mer- 
cantilists proper. 

The necessity of raising ready money for war first set the stone rolling, 
which - if we may adopt the saying of a modern Pope - shattered the 
Colossus of the scholastic teaching as to usury. The saying 'Pecunia 
nervus belli' has become a chief root of modern economic doctrine. Only 
one chief root, however. The other is found in Machiavelli's saying which 
attributes more importance in war to man-power than to money. 

The controversy between Machiavelli and Guicciardini lasted long in 
literature without being decided. Even in mercantilism a tendency 
friendly to labour is often observable alongside of a tendency friendly to 
capital. The latter, however, prevailed. The significance of capital, 
under-estimated by the teaching of the Middle Ages, over-estimated by 
mercantilism, was first put in its right place by Adam Smith. This has 
not prevented his followers, however, from falling once again into both 
extremes. We are, therefore, justified in saying that the controversy 
between Machiavelli and Guicciardini already contains the germ of the 
latest problems of social science. 

The Need of Capital for War. The system of dealing in kind prevalent 
in the early Middle Ages had been turning by degrees into a monetary 
and credit system, but this transformation went on with feverish 
rapidity at the time of the Renaissance. One chief symptom was the 
greed for the possession of money. Never since the time of the Roman 
Empire had everything been so easily bought with money: the highest 
ecclesiastical and worldly dignities, the blood of men, the honour of the 
greatest ladies, and eternal salvation itself. Gold and spices, but chiefly 
gold, was the goal of the Portuguese explorers, the goal of Columbus, his 
exalted patrons and his followers. Machiavelli was justified in speaking 
of the 'vileness' of human nature. The same age also produced charac- 
ters of heroic self-abnegation, which shed their radiance across the cen- 
turies. These, however, did not occur among the great ones of the world, 
and the same great movement which showed the strength of faith and of 
conviction as opposed to the prevailing egoism was only made palatable 
to many rulers by the fact that it increased their revenues. 

The general greed for money which seized on the upper classes in the 
epoch of the Renaissance concealed other and more far-reaching motive 
forces. The money so passionately desired by princes, high ecclesiastics 
and nobles, was used in the first place to satisfy the ever-growing 
general ostentation, the luxury in food, and other sensual gratifications; 


but it also farthered the progress of art and science and the many 
passions they embrace, among which the most distinguished and the 
most costly was a gigantic love of building. In the case of princes other 
large forms of expenditure grew up which, unlike those already men- 
tioned, had a non-personal character. First of all, those called forth by 
the transformation of the mediaeval feudal state into the modern 
bureaucracy. The ever-increasing expenses of the state in administra- 
tion, justice and diplomacy entailed claims on the princes which, as we 
have seen, they tried for a long time to pass on at least in part to others, 
but which nevertheless necessitated the payment of a growing number of 
professional officials. What the princes managed to save by allowing the 
officials to help themselves in other more or less legal ways, they must 
have had to pay out again in bribes to the officials of other princes. 
War, however, with its extraordinary demands ate up more money than 
all these other claims taken together. The same boundless ambition 
which expressed itself in the less powerful princes by gigantic building 
schemes, led the more powerful and a progressive foreign policy which 
could only be carried out by means of perpetual wars. Wars and arma- 
ments were the department among the princes' activities where the 
transformation of a system of dealing in kind into a money and credit 
system went forward most speedily. 

The feudal system of defence had undoubtedly constituted an 
advance on the original German system where all free men were liable 
to bear arms. It had its origin in the increase of the claims, both techni- 
cal and economic, which were made on the men under arms, and under 
the feudal system these claims were satisfied by distribution of labour. 
A special military caste was formed among the feudatories. But like all 
human institutions the feudal military system had from the beginning a 
fatal weakness. It recognized only a contractual obligation to bear arms. 
If the feudal lord failed to fulfil his duty to his vassal or asked more of 
him than his feudal due, the vassal could leave his lord. We know that 
this often happened and we know too that this fact largely helped the 
development of the mercenaries. 

These developed at first chiefly in the cities, for here the general 
obligation of all citizens to serve under arms early proved incompatible 
with increasing economic development, and the feudal system in the 
nature of things could not be of importance in the organization of 
defence. Here too the use of money made such strides that it was soon 
possible to hand over the conduct of wars without the city wall to 
mercenaries. For a long time the princes could not do this owing to the 
smallness of their monetary revenue. It was only when the technique 
of war had been completely revolutionized by the successes of the cities 
and the Swiss Confederacy and the knightly armies had sustained re- 


peated defeats that the princes saw themselves obliged to reorganize 
their military system. Service in arms, which under the feudal system 
had become a profession, developed in the thirteenth and fourteenth 
centuries, through the fact of payment into a form of manual labour; and 
finally in the fourteenth and fifteenth centuries, through the use of 
muskets and cannon it became an industry, requiring skilful direction 
and large capital. The princes were not yet capable to satisfying their 
claims on the technical side because they had no standing armies; and on 
the economic side, because their monetary revenues were insufficient. 
Under these circumstances the conduct of war fell into the hands of 
professional private undertakers, the Condottieri, and they for the first 
time since the classical epoch created an art of war, a highly organized 
technique. Italy was the classic country of these general undertakers 
of war, and it was here too that the renaissance of the monetary system 
first made itself evident. The Condottieri themselves were at the 
beginning chiefly German or Spanish, and even when the leaders' posts 
had mostly been filled by Italians, the rank and file still remained 
chiefly Germans, Swiss, and Spaniards. 

The Condottieri relieved the princes of the training and generalship 
of the armies, not, however, of their maintenance during the war. The 
economic difficulties connected with the size of the armies and their 
equipment continually increased and were at first a source of far worse 
evils than those of the mediaeval system. 

Like the feudal liability to service, the hire system only rested on 
contracts which the war lord made with leader of mercenaries, and the 
leader -usually through the agency of the captains - made with the 
soldiers. While, however, the feudal contract was largely based upon the 
public code, under the new system the contracts were only based on the 
civil code, and in particular on the rights of property - Blood for money; 
no money, no Swiss! 

This relation, inherent in the system, gave the wars of the sixteenth 
and seventeenth centuries their particular character. It explained the 
unseemly and fatal influence which the badly paid troops brought to 
bear on the course of the world's history because they could not be 
trusted. How often the French Kings, or even more the German 
Emperors, have been left in the lurch by their mercenaries, or hindered 
in carrying out their war plans by the threat of mutiny and desertion.' 
Think of such events as the storming of Rome by Charles V's unruly 
Germans, or the sack of Antwerp by the Spanish soldateska. The 
'Ribauds' of the thirteenth century are reproduced in the 'Routiers,' 
'Ecorcheurs' and 'Retondeurs' of the fifteenth, and the mercenary 
armies of the Thirty Years War were no better. This war would never 
have lasted so long if at every opportunity for peace there had not been 


ambitious and greedy commanders and troops ready to fight against 
anybody for the money of any power which had a mind to fish in 
troubled waters. 

The degradation of military service into a mere trade would not have 
led to the worst, had not the bad financial position of most of the war 
lords and the faulty organization of the monetary system in the 
princes' budgets led of necessity to forced 'deliveries in kind,' that is to 
say to robbery, murder, and arson. During the war the mercenaries 
were often actually forced to rob friend and foe alike; and when it was 
over they were not infrequently driven to maintain themselves by 
highway robbery till they found a new employer. This told adversely 
not only on the peoples, but also on the princes, who always had it 
before them that they would be ruined by the cruel maxim of the 
mercenary leaders that 'War must feed war.' 

Machiavelli, who certainly had no tender feeling for the Bufferings of 
the peoples, hated the mercenaries from the standpoint of the princes 
and their power. 1 The princes on their side, however, always sacrificed 
everything to the attempt to satisfy the indispensable mercenaries, 
because only so could they be prevented from deserting and committing 

In the fifteenth century Charles VII of France formed a small stand- 
ing army. While, however, the first consequence of this measure was 
the transformation of the Taille into a permanent tax, yet for many cen- 
turies longer the further carrying out of this beneficent reform was pre- 
vented by the princes' insufficient money revenues. The foreign policy 
of the Great Powers of the sixteenth and seventeenth centuries could 
not yet rely to any large extent on standing armies. 8 

The meaning of this is best shown by a few figures. In the year 1532 
Dr. Christopher Scheuerl calculated the cost of an average war equip- 
ment inclusive of pay for six months, but exclusive of provisions, 
baggage and other smaller costs, at 560,000 fl. A Spanish army corps 
which in the second half of the sixteenth century was sent to Southern 
Italy and had to be kept there half a year cost on an average 1 J million 
ducats. The expenditure of the Spanish Crown in putting down the 
rebellion in the Netherlands averaged two to three million gold crowns 
a year, i.e. more than the yearly revenue of the Netherlands Govern- 
ment during the most flourishing trade period. Now let us consider 
that in the sixteenth century there were only twenty-five years, in the 
seventeenth century only twenty-one years, in which there were no 

1 Of. Machiavelli, Scrilti inediti ed. Can^trini pref. xxiv, & 281 fi. Canestrini, 
'Document! per servire alia storia d. milizia italiana ed. Canestrini' (Arch. star. 
Hat. XV), p. cviii ff. oxxiii ff. 

'dement, Jacquet Ccewr et Charles 711, voL I, 76 ft., 83, 107 ff. 


war-like operations on a large scale. These facts should suffice to give 
some idea of the effect of the enormous demand for capital for war pur- 
poses on the financial arrangements of princes, more especially as in the 
absence of a regular army the irregular and incalculable nature of these 
requirements made impossible any orderly system of finance. 

The capital needed for war belonged from its nature to extraordinary 
expenditure. Moreover, this very often occurred suddenly and de- 
manded immediate satisfaction. Finally, it usually had to be met not in 
the places where revenue was raised, but in far distant countries. The 
principle that war must feed war often could not be acted upon, not 
only if the troops were on home territory, but even in the enemies' 
country, either from political considerations or because there was 
nothing further to fight. The armies needed reinforcements and fresh 
equipment. All this required money, and, as we see from the wars of 
Charles V and Philip II, often hundreds of miles from the place where it 
was to be found, and months or even years before the time when the 
revenues from the domains and taxes and other dues accumulating very 
slowly in the princes' coffers should have reached the required amount. 

Finally we must bear in mind the dangers of the roads, the lack of 
transport and its extreme slowness and the great difficulties of moving 
large sums of money for any distance. It is only when all this has been 
brought before us that we can have a true picture of the anxiety with 
which the princes of the sixteenth and seventeenth centuries, even those 
who were financially the best situated, must have remembered in war- 
time the old saying, Tecunia nervus belli.' 

Means of Meeting the Demand for Capital for War. The foreign policy 
of the European Great Powers in the period from the middle of the 
fifteenth to the middle of the seventeenth century was only to be 
successfully carried out if there were large supplies of ready money in 
an accessible form. This, however, was not by any means always the 
case. Though the princes recognized that money was the sinews of war, 
they were unable to act on this maxim. Their revenues were still 
mostly revenues in kind, and where they did consist of ready money, 
they were usually not found at the time or place when they could have 
been used for war. Above all, they were often quite insufficient to meet 
the war expenditure. 

Neither the revenues from the princes' own domains, nor the old 
feudal dues which were mostly quite unproductive, could be increased 
to any considerable extent. Permanent taxes and taxes on transactions 
of the modem type were only just beginning and as yet amounted to 
very little. They only came into consideration for war purposes in' so 
far as they could be farmed out or mortgaged. The customs were 
gradually increased, but inasmuch as they were too numerous and their 


aims were not economic, but fiscal, the attempts to increase them raised 
so much ill-feeling that they could not be carried far, when the home 
industry was insufficient for the requirements of the country or where 
trade was the most important source of income. England alone at this 
time enjoyed a highly productive tariff which was adapted to the 
furtherance of national economic ends. 

The publicists of the Renaissance never failed to urge the princes to 
collect a war chest, but only in a few instances was their advice fol- 
lowed. The Emperor Frederic III, King Henry VII of England, Pope 
Julius II, the Duke Galeazzo Maria Sforza of Milan, and Alfonso I of 
Ferrara, had some of them kid in large stores of ready money and some 
large treasures in jewels and gold and silver plate, and in the case of the 
Italian princes we have mentioned how their policy profited to the full 
from their forethought. The same cannot be said of the more important 
princes outside Italy. If they were good managers they did not pursue 
an active foreign policy, and if they did so, they were not good managers. 
A careful prince always had for his successor a spendthrift who did not 
understand how to utilize his predecessor's financial policy. Thus 
Frederick III was succeeded by Maximilian I and Henry VII by Henry 
VIII. King Louis XI and Louis XII of France, and Ferdinand and 
Isabella of Spain held their property together with a firm hand, but did 
not go so far as to form a war chest. When such a treasure was collected 
in other countries it was never sufficient to carry on years of European 
war. diaries V and Philip II, who had enormous national treasures in 
gold and silver in their territories, used these to carry out their world- 
wide plans. All the treasures of Peru and Mexico proved inadequate in 
the long run, and in any case they were not easily accessible in Italy, 
Picardy, Flanders, or Germany. 

The possibility of raising extraordinary war taxes depended in the 
first place on the power of the prince over his subjects. This power was 
of very different degrees in different countries, Germany and France 
being the two extreme points. In Germany the Emperor, when the 
Empire was in extremity, usually obtained little or no help from the 
Diet of the Empire, while in France the Grown was often able on occa- 
sions of far less urgency to obtain the grant of millions. But in France 
itself, the long wars could not be carried on by means of such taxes; 
they were insufficient and came in much too slowly. No European prince 
was as yet able to impose taxes in kind or grants, 1 and the prosperity 
of the agricultural mass of the people had not yet reached such a point 
that it was possible to get anything by turning the tax screw. The 

1 Philippe de Commines, Memoirea, V. 19: 'Y a il roy ne seigneur sur terre qui 
ait povoir, oultre son demaine, de mettre un denier BUT sea subjects sans octroy 
et consentement de ceubc qui le doibvent payer, simon par tyrannic ou viollence.' 


nobility and the Church, who were the greatest landowners, submitted 
themselves to taxation with a particularly ill-grace; the tax-paying 
capacity of the nobles, who themselves suffered from a chronic deficit, 
was usually not large; while the Church, which could have paid more, 
only did so when this served its own interest. The cities were able to 
pay and usually disposed to tax, or in case of necessity they could be 
compelled to do so. In fact they were heavily taxed, but the princes 
had to take care not to kill the goose that laid the golden eggs. In the 
case of a sudden urgent need of capital even in the cities it was as a 
general rule only possible to obtain the necessary sums as a loan. 

Among financial prerogatives the Mint was far the most productive and 
it was also the only one whose yield could be increased at short notice. 
Many princes, both in the Middle Ages and later in the sixteenth and 
seventeenth centuries, did a roaring business in currency depreciation. 
Trade, however, learned to guard itself against bad coining on the part 
of the authorities, both by having its own particular trade currencies 
and by the development of money surrogates. This considerably 
diminished the profit to be made out of currency depreciation. The 
princes themselves also began to perceive that this barbaric financial 
expedient was in the last resort ruinous for themselves; and in the large 
states, at any rate, it was only adopted in the case of extreme necessity. 

Its place was taken by another method of raising money still more 
objectionable from the political and economic point of view. This was 
the sale of offices. The growth in the number of officials led to the same 
step as the development of the army. The princes left the fulfilment of 
the new duties to private undertakers. We shall see this phenomenon 
more especially in the domain of financial administration, when in the 
Eenaissance period the system of fsvrmmg out the taxes came into exten- 
sive use. The sale of offices extended also to other branches of the 
administration and even to the judicature. It was the most prevalent in 
the French and the Papal administrative systems. In both instance 
new offices were created on a large scale, only in order to be sold. This 
process could, however, not be repeated sufficiently often, and on the 
whole was not productive enough to be of much weight in view of the 
continued increase of war expenditure. 1 

The most rough and ready of all financial expedients, the sale of the 
Crown lands, had even in the feudal state outrun the bounds of ex- 
pediency. The enf eoffing of Crown lands had in most cases constituted 
a permanent alienation. It had been carried so far in Germany that 
towards the end of the Middle Ages there was no Imperial domain land 
properly speaking. The efforts of the German Emperors to get it back 

1 Of. Woker, Das fcfrcWtcAe Finanzieesen der Papste, p. 6. For France cf . B. 
Kcot, Hiatoire des Etati gdn&raux, I, 434 ft., n, 117 ft. 


were for long brought to nought by their pressing need of money and 
were turned in the contrary direction. On the other hand, the domains 
of the House of Hapsburg had increased largely; the same was true of 
the other states where the feudal system had produced the same conse- 
quences, the feudal lords had for a long time striven with growing 
success to get back the lost Crown domains. It was on this account 
that towards the end of the Middle Ages the sale of parts of the domains 
or their revenues was everywhere regarded as a desperate financial ex- 
pedient. The mortgaging of portions of the domain lands (i.e. the 
sources of revenue) was rightly regarded as equivalent to sale, while 
the pledging of the revenues was a favourite and general expedient. 

These methods of covering extraordinary monetary requirements 
were either no longer or not yet applicable. They were all more or less 
objectionable from a political or economic point of view. Moreover, 
even when they were sufficient for the requirements of war, they could 
not be applied with sufficient speed to meet the case, nor sufficient ease 
to meet the wishes of the princes, who accordingly were as a rule reduced 
to the use of credit. 

The Beginnings and Bases of Public Credit. Public credit exists as 
soon as there is any public authority. The chief, who in return for ser- 
vices expected or received promised his subject or follower a service in 
return, was bringing public credit into play. If this return was to be 
periodic or annual, it assumed the character of a funded debt, this was 
also the case when one prince became liable to pay tribute to another. 
Every purchase, on the other hand, which a prince undertook without 
cash payment constituted a floating debt. The distinguishing sign of 
public credit is already present. The debtor who cannot, or will not, pay 
cannot be constrained by law (though he may be compelled by force) to 
fulfil his obligation, because the authority which is his as lord can pre- 
vent the compulsory application of the law. 

A Nuremberg merchant of the sixteenth century, on an occasion when 
it was feared that the French Grown would cease to pay its debts, de- 
clared that 'Great lords do as they will.' The essence of public credit is 
already recognized here. It means that of the three conditions for 
any credit - the belief that the debtor can, will and must pay - the 
third condition is usually absent unless the creditor can assert his claim 
by the use of force. The growth of the general feeling for justice 
exercised a certain pressure on the debtor and made him keep his 
engagements even in the case of public credit, and the increase of 
economic insight told in the same direction. But even at the present 
day we often see that these motives are insufficient to prevent gross 
violations of public credit. In earlier times matters were even worse. 
Anyone who gave credit to a prince knew that the repayment of the 


debt depended only on Ms debtor's capacity and will to pay.* The case 
was very different for the cities, who had power as overlords but were 
also corporations, associations of individuals held in a common bond 
According to the generally accepted law each individual burgher was" 
liable for the debts of the city both with his person and his property. 
Should the city fail in its engagements the creditor was entitled to re- 
course against the person and property of any burgher who fell into his 
power. The cities, even as late as the sixteenth century, expressly gave 
this rightto their creditors, who on occasion knewhowto take advantage 
of it. It constituted an effective means of compulsion, for the burghers 
were often forced by their trade to remain outside the protection of their 
city with a considerable amount of their property. From an economic 
point of view this motive was of great importance. The general principle 
that the holder of public authority could not have the law he had 
broken enforced against him, was not infringed but confirmed by this 
right of the creditors of cities. 2 

Connected with this is a still more far-reaching and fundamental 
difference between the debts of princes and cities. The fact that all 
burghers were liable for the debts of their cities, while this was certainly 
not the case without more in regard to the subjects of princes was de- 
cisive for the chief basis of any credit, the ability to pay. The princes' 
capacity to pay depended first of all on the amount of the revenues 
from their domains. As these were never sufficient to pay the interest on 
large debts, or even to repay the capital, the most important con- 
sideration in a prince's capacity to pay was his power over the purses of 
his subjects. This power, as we saw, had various degrees, but never 
*rent so far that the subjects were liable without more to meet the 
primee's debts. 

Towards the end of the Middle Ages in some countries princes had 
the right of raising forced loans from their subjects. They could also, as 
we shajl see, use the credit of the cities for loans for their own expendi- 
ture. For the loans, however, which they themselves raised the sole 
guarantee besides their domains was the taxes expressly granted by 
their subjects. If the subjects were themselves to be liable for such 
debts, a, special grant by Parliament was needful; and in order to obtain 
this the princes usually had to make some concession in return, e.g. to 

1 Too much importance is attached to primal rights in regard to public credit. 
This is true, ag. of the otherwise excellent work of A. v. Kostaneoki, Dor offentt. 
Credit im Mittdalter (Schmollere Staats- tmd sooialwissenschaftL Porachungen 
1889, IX. 1). P. u g. especially do not sufficiently distinguish between public 
and private credit. 

Gierke (Deuteches Qenoaaenschaftsrecht, U, 383 ff. 770), of. Kostaneoki I. c. 
P- 12. (fiemembrancia 1579-1664, Analyt. Index. London, 1878, p. 189ft. and 


make over some definite revenues of their own for the Interest and re- 
payments of the debt. This was usually the condition imposed before 
the princes were allowed to avail themselves of the credit of the cities. 
The princes, however, strove with increasing success to convert the 
voluntary contractual liability for certain of the princes' debts on the 
part of their subjects into a general and compulsory liability arising 
from the authority of the princes. Long and violent struggles were 
necessary to attain this end. Meanwhile loans at high interest were 
greatly hated by the people, and this naturally hampered the princes in 
their financial operations. In the case of the debts of princes there was 
never any question of unlimited solidarity, as in the case of the city 

Even in the cities the burghers often forbade the council to burden the 
city with debt without their consent. While therefore the princes after 
centuries of straggle extended their power, which had been strictly 
limited by contract, the authorities in the towns had their previously 
unlimited powers restricted in this way. Even at this later time, how- 
ever, there were hardly any city loans for which the whole community 
was not liable, while even at the time when the princes' power had 
reached its highest there were always some princes' loans for which the 
subjects were not responsible. 

Even when the subjects had to meet the debts of their princes, this 
did not result in such a large increase of capacity to pay as that which 
the cities enjoyed through the personal liability of their burghers. The 
burghers were the ckss of the population economically the soundest 
and possessed of the most capital, while among the princes' subjects 
there were very few of this type. 

In regard to the will to pay, also, conditions were not usually very 
favourable in the case of princes. Lending at interest continued to be 
strictly forbidden both by ecclesiastical and secular law, and though 
certain princes in the sixteenth century transformed the ban on interest 
into a interest tax, the doctrine of usury offered them a most useful 
handle for breaking the most solemn promises to pay, if their ceaseless 
money difficulties became specially pressing. The princes and their 
advisers seldom had sufficient economic foresight and insight to be 
deterred by higher considerations from the momentarily desirable 
state bankruptcy. Such considerations weighed the less with them as 
the creditors were very often not of the country, but foreign merchants 
or bankers; and also because princes were less affected by the economic 
weal or woe of their subjects than they now are. 

In the cities ruled by merchants, whose creditors were as a rule 
their own citizens or those of a friendly city, the situation was entirely 


If a prince died, his successor as such was not bound to take over his 
predecessor's debts. 

Though as a matter of fact they were mostly taken over in the six- 
teenth century, this was less due to a sense of justice than because the 
successor in his monetary requirements was usually dependent on his 
predecessor's creditors. 

Even in the second half of the eighteenth century the jurists were by 
no means agreed on this point whether a prince was bound to recognize 
the debts of his predecessor; and examples are not wanting to show that 
this was not invariably the case. 1 In any change of government the 
creditors of the Crown were in great anxiety on account of their claims, 
if they had lacked the foresight to get the heir as a co-signatory. 

While the legal principle that 'le roi est mort, vive le roi' was not 
applied automatically to the prince's debts, the cities were perpetual 
persons in the present legal sense that though the holders of public 
authority might change it remained unaffected thereby. 

We see accordingly that the three first principles of all credit -the 
belief that the debtor can, will and must pay - were weak in earlier 
times in the credit given to princes, but strong in the case of that given 
to cities. The cities accordingly enjoyed much better credit than the 
princes. In fact, even towards the end of the Middle Ages the latter 
had, properly speaking, no credit, that is no personal credit at all. 
About the middle of the eighteenth century it was considered necessary 
to remind the capitalists of the old saying, 'Lend not to him who is 
mightier than thou; or if thou lendest, look upon thy loan as lost.' * 

This held good of all loans the repayment of which the prince pro- 
mised 'in verbo principis' without other security than his princely word. 
As Cardinal Granvella was credited by his contemporaries with the pro- 
verb in regard to such financial obligations that 'There is a time to pro- 
mise and a time to keep,' so in Germany in the previous century the 
saying went, 'The noble makes promises and the peasant keeps them.' 3 

Loans of Princes. As the princes, as such, had very little personal 
credit, they had regularly to give security for their loans. Only one kind 
of loan formed an exception, the forced loan, and this played an import- 
ant part. Since the thirteenth century the princes more and more con- 
tracted the habit of obtaining forced loans from those among their sub- 
jects who relied on their protection or were in some other way dependent 
on them, and who also had liquid capital at their disposal. These, how- 

1 Cf. e.g. Job. Frd. Kobii, Commentatio juris praesertim germanici - de pe&mia 
mutuatida tuto coUocanda (Gottingen 1761), 37. 

'Noli foenerari fortiori te, quod si foeneraveris, quasi perditum babe,' Ecde- 
eiastieus viii, 15, quoted in Kobina Lo. 36). 

1 Granvella's saying ia quoted by a representative of tbe Welser in 1547 (Ztsckr. 
d. hittor. Ver. f. Schwaben 1875, p. 131). Tbe second cf. Kobius Le. 24. 


ever, were regarded by the princes themselves, still more by their sub- 
jects, not as real loans, but as a kind of tax, and actually they were for 
the most part indirect taxes. 

The princes anticipated taxes which had been already passed, but 
which did not come in sufficiently fast, by the method of forcing their 
rich subjects to advance the amount of the tax according to an arbitrary 
estimate. No special charge on the tax was given for the most part, and 
there was no interest. 1 Such forced loans were often imposed before the 
taxes from which they were to be repaid had been granted. The object 
was then clearly to render illusory the right of the States General to 
grant the taxes. In any case, forced loans were most in favour with 
princes of absolutist tendencies, chiefly with Louis XI and his successors 
on the French throne, until from the time of Richelieu the Crown no 
longer sought to cover itself by the device of the forced loan, but could 
levy direct taxes of every kind without calling the States. In England, 
on the other hand, under Henry VIII, Elisabeth, and James I, the 
forced loan had at times been very common, but in 1628 the Crown was 
forced, owing to the growing resistance of Parliament, to renounce a 
financial expedient which the people had always bitterly hated. 

In other countries, also, the subjects did all they could to ward off 
forced loans; and even in France the Crown was not sufficiently power- 
ful in the sixteenth century for it to be able to cover all its extraordinary 
monetary requirements by such loans. In view of the crushing burden 
of interest due to the undue extension of credit through voluntary loans 
in the second half of the sixteenth century, a writer like Botero * with 
absolutist tendencies might be disposed to praise forced loans without 
interest; and the princes themselves found it advisable in time of great 
monetary requirements to make use as far as possible of voluntary 
loans. These moreover often contained an indirect compulsion, e.g. the 
creditors were induced to lend again by the fear of losing their old 
claims, and foreign merchants were threatened with the withdrawal of 
their privileges if they declined to help the King with advances - and 
other terrorism of the same kind. 

There were, on the other hand, some forced loans which, from the 
fact that they were called for at a moment of general patriotic emotion, 
had the character of semi-voluntary loans - e.g. in France after the 
battle of St. Quentin in 1557, or in England in 1588 when the country 
had to be defended against the Spanish Armada. When the French 

1 Royal appeals foi forced loans: Louis XH of France (1513) (in Registry des 
deliberations du Bwreau de la ViOe de Paris I, 201 if.); and James I of England 
in 1625 (Rushwortk, Hutor. CoU. 1, 124). 

Ragion di Stato, H, 7. Of., on the other hand, Diomede Ourafa (about 1470), 
in Fornari, Tear, econom. n. Prov. napoKt., p. 59. 


Crown demanded loans from the cities, and the citizens had their shares 
compulsorily allotted to them, this was not a forced loan proper, since 
capital and interest were secured on certain definite revenues. In the 
case of the true variety, the creditors regularly ran the risk of losing 
their capital, without getting high interest as a compensation for the 
risk incurred. Owners of capital had usually to be brought to make 
loans of this kind by compulsion. 

In voluntary loans, on the other hand, they demanded not only high 
interest, but also security in the form of a guarantee or pledge. 

We have already spoken of the guarantee of the heir apparent. Next 
to this stood that of the highest officials and dignitaries, which was very 
general in the Netherlands in the sixteenth century. The Diet of a pro- 
vince sometimes guaranteed the loan contracted by the prince, but 
much the most general form was the guarantee of a respected city, e.g. 
London in the case of the loans of the English Crown, or Antwerp in 
the case of the loans of the Court of the Netherlands. 

If the prince promised himself to defray the interest and repayment, 
the surety was only liable if he was in default. In many cases, however, 
the loan was not contracted by the prince, but in the name of the 
official, noble, Diet or city on the prince's account. This was a different 
relation from a legal point of view, but from an economic standpoint it 
came to the same thing. It is not the credit of the prince, but that of the 
high official, or city, which was the decisive factor. The most important 
of the intermediaries who gave their credit for the prince were the finan- 
cial officials and the cities. 

The chief difference between the financial administration of the 
modern state and the older system is the prevalence under the latter of 
the system of farming out the revenues. The cities as well as the princes 
farmed out their revenues, and the system extended as the increased use 
of money made the financial administration a special art. The princes 
had not the necessary staff of officials, and it would have been the height 
of foolishness to have the many small monetary revenues collected by 
poorly paid venal officials. It was very important for the princes to 
have their revenues at their disposal in large sums at the place and time 
when they needed them. They accordingly made over the collection of 
many revenues to private undertakers, who were able to make advances 
on them. In the case of the cities, the first reason was not equally 
cogent. If nevertheless they employed the system, it must hare corre- 
sponded to some general need. 

The entire revenues, however, were not farmed out, and the princes 
and cities accordingly needed their own financial officials. The same 
causes, however, which made it necessary to employ tax farmers caused 
the officials to be chosen from the class which alone was technically 


and economically qualified for the duties of their position, that is the 
merchant class. There was no radical distinction between financial 
officials and tax fanners. The fanners were for the most part the agents 
and the sleeping partners of the officials. They formed one class which 
we will consider in detail later. 1 

These financiers who administered the princes' revenues enjoyed good 
credit, both from their position and because in general they were rich 
merchants. They employed this for a consideration - for the princes, 
either making advances themselves or obtaining them in their own 
names from other capitalists. Their credit was therefore the most im- 
portant of the various elements from which the state credit was after- 

The princes, as we see, could only cover their extraordinary monetary 
requirements through voluntary loans by availing themselves of the 
credit of their magnates and high officials, diets, cities.lor financiers. This 
was only done by their giving a security to those who allowed them to 
use their credit, as the lenders proper greatly preferred this to the mere 
guarantee. The security might be a pledge as was the case when it con- 
sisted of jewels or other valuables. Only loans of small amount could be 
raised on pledges of this description, and therefore since the end of the 
Middle Ages they ceased to be important. The same holds good of the 
mortgaging of individual Grown lands, a process which the princes held 
to be equivalent to sale and therefore disliked. The most usual form of 
security was the mortgaging definite revenues. Not only in the case of 
loans, but in all the prince's debts, even in the case of small purchases of 
commodities on credit or pensions to servants, as well as for periodic 
payments to foreign princes, the creditor expected to have his claim 
secured on a definite branch of the prince's revenue. By means of such 
warrants (assignations, consignations, librauzas, tallies) the creditor 
received a legal title to the payment of his claim, and this often con- 
tained the authority in case of necessity to satisfy himself directly from 
the revenue upon which he had been given security. 

This authority, however, only constituted a sufficient security when 
the income accrued direct to the creditor without the agency of the 
prince's officials. This was often expressly stipulated, especially in the 
case of larger loans, either in connection with the leasing of the revenue 
in question; or by collecting the yield of the revenue without taking 
over the lease until the creditor had obtained satisfaction both for 
capital and interest; or finally by a formal purchase of the princely 
revenues, which then became the property of the lender. 

1 Lettree et mbnoirea de Colbert erf. Cttment II, p. cxcix. Colbert enunciated the 
principle that 'Un financier doit estre attpres d'un surintendant ee qui est un soldat 
aupres de son oapitaine; il ne doit 1'abandonner qu'aveo la vie.' 


The necessity for giving security on definite revenues, or for pledging 
or selling them to creditors is a chief cause of endless subdivisions, 
which, along with the system of fanning out the revenues, was a 
characteristic of the old financial system of the princes as opposed to the 
modern system. This necessity it was which brought to naught the 
attempts of princes to reorganize and unify their finances, so long as 
there was a load of debt which could be lightened by farming the taxes 
or splitting them up. 1 

The system exemplifies a vicious circle. Excessive indebtedness on 
the part of the princes was made necessary by the conditions we have 
seen. It could not be borne without the system of farming out the taxes 
or the pledging of individual branches of revenue. This led to a fright- 
ful degeneration of the financial system, which was unavoidable while 
the circumstances lasted, which led to the repeated heaping up of debts. 

Incurable financial disorganization, corruption of the whole of public 
life, dependence of the Government on the financiers, exhaustion of the 
people - these ills, which proved the ruin of many states, sprang im- 
mediately from the farming out and splitting up of the finances of the 
princes. They would have been impossible without an undue extension 
of credit. They were, however, rooted most deeply, on the one hand 
in the princes' passion for war and glory, and on the other in the pro- 
gress, especially the irregular progress of an economic system based on 
the use of money. 

The loans of princes were usually at first 'anticipations,' floating 
debts. These could never be entirely avoided, and we can prove that 
they existed already in the earliest Middle Ages. Nevertheless French 
publicists, from Bodin to Boisguillebert, are not wrong when they put 
the real beginning of the regular large anticipations in the last years of 
the reign of Francis I and the time of Henry II of France. 2 For it was 
at this epoch that the interest-bearing floating debt became a necessary 
part of the princes' budgets. These could not have existed without the 
debt, which, however, proved their ruin. 

The floating debt had a fatal effect in the first place because of the 
enormous interest, and secondly because in the excessive subdivision 
of the whole financial system; the individual parts of the princes' 
revenue were often burdened with charges far in excess of the total 

An extensive system of mortgages without a register gives only 

1 Adler, Die Organisation der Centralverwattung unter Kaiser Maximilian I. 
Ct e.g. for IVance: B. Brown, Calendar of State papers, VI, 956, 1557; for Spain: 
Brit. Mus. Cott. MSS. Vespasian CL VI, foL 133 ff., 1575. 

Bodin, Lee six limes de la republique. Paris 1583, VI, 2. Boisguillebert, 
Factom de la France en Da're, p. 297 fi. 


a weak analogy foi the state of confusion and fraudulent over- 
indebtedness which perpetually characterized the finances of most 

Funded loans at the end of the Middle Ages were still relatively un- 
important for the princes in comparison with the floating debt. Most 
princes did not raise any funded debt, and we shall see that even those 
who apparently did so, really concluded transactions of a rather differ- 
ent kind. Here we must distinguish between funded debts in the wider 
and funded loans in the narrower sense, between the loans raised by the 
princes themselves and those which their parliaments and cities raised 
for them or took over from them. From early times the princes had 
secured on separate parts of their income both non-recurrent expendi- 
ture and also recurrent expenses such as official salaries, pensions, 
donations, annual payments to the Church. To the extent of this 
burden these portions were pledged during the lives of the officials, pen- 
sioners, etc., or permanently alienated; for quite apart from the per- 
manent payments made to the Church, it early came about that persons 
who were granted payment or pensions as an act of grace were given the 
right of handing them on to their heirs. 1 These grants already approxi- 
mated closely to our state 'rentes' or annuities, except for the fact that 
they were always 'situated' on some definite branch of the princes' 
revenues and also they originated, not because the recipients had 
handed over capital in return for the annuity, but because they had 
served or were about to be serviceable to the prince in some other 

The conception of the 'perpetual debt" had therefore been introduced 
in practice with the financial system of the princes long before a per- 
petual authority of the state was recognized in principle. The separate 
branches of the princes' revenues were regarded as real property which 
could be burdened with perpetual rent charges in the same way as 

Probably the princes had always known how to obtain, not only other 
services, but also capital by securing life or perpetual annuities; for the 
cities had done so from very early times. The first certain instance of 
such a transaction, however, in the case of a prince, occurs only in the 
second half of the fifteenth century, and then only in the case of the 
Kings of Castile. Even the Popes, whose property and income were cer- 
tainly well established, did not begin till the year 1526 to get money for 
themselves by funded loans ('monti') on the model of the Italian city 

1 For such changes in revenues of Counts of Champagne see de Joubainville, 
Histoire des Dues el Dea Gomtes de Champagne, V, 849. For the burden on the 
revenues of the French Crown 'tarn ad vitam quam perpetuo' in 1316 of . Vuitry. 
Mtudes mr le Regime Financier de la France, New Series, I, 4, 


states. 1 In France the first rentes began to be issued by the cities in 
1522, especially by the city of Paris on behalf of the Crown, and it was 
long before the Crown could dispense with the cities as intermediaries. 
The English funded debt starts with the revolution of 1689. In the 
Middle Ages the rulers of the Netherlands frequently adopted the ex- 
pedient of the sale of annuities. But in this case also they employed as 
intermediaries the diets or the individual cities which 'lent their seal' 
to the prince. The diets or cities concluded the arrangements for the 
loan and the princes pledged themselves to pay the annuities for them. 
Later as the power of the rulers increased, they ceased to ask the diets 
or cities for their consent and issued annuities on their own account. 
They then funded them on the individual provinces or cities, transferring 
revenues to them for the payment of the annuities. During the six- 
teenth century many annuities on a large scale were issued in this form. 
The next step forward was that revenues were no longer assigned. 
But even in the Netherlands in the sixteenth century there is no instance 
of a prince selling annuities without charging them on a province or a 
city. 2 

A prince, as such, had not the power of raising large funded loans, if 
he had not at his disposition the credit of the corporately organized 
diets or cities. It is characteristic that the funded debt of the Spanish 
Crown in the sixteenth and seventeenth centuries increased chiefly 
through the repeated state bankruptcies. These always ended by the 
Crown undertaking a compulsory funding operation of its gigantic 
floating debt, i.e. it reduced the interest by 100-200 per cent, and did 
away with the obligation to repay the capital. 3 The Crown could not 
obtain the enormous sums it required directly by funded loans. It 
therefore first contracted floating debts at a high rate of interest and 
every twenty or thirty years converted this compulsorily into funded 
loans. These, however, were only saleable at a large discount, as 
though they were always charged on definite revenues. This was only 
a nominal security as each head of the revenue had long been over 
charged, and moreover was almost as a regular thing withdrawn from 
the creditors in case of need. In this the Church lent ready aid to the 
Crown by means of the ban of usury. 

1 Codigos Espanoles, VI, 446; VH, 275. Mem. de la Seal Aead. de la hist. VI, 
141 ff. M 1m*,Deju*tit.etjv r e,lI,Di*p.38a,No.l5. Cf.Coppi, Finance dtUoStoto 
Ponteficio, Roma, 1866, p. 3 ff.; Ranke, Fvrsten und Vollser von Sudeuropa, IV, 
10 ff.; Viihrer, Histoire deladette publiyue en France, 1, 16 ff.; Sinclair, History of the 
Public Revenue of ike British Empire, II, 67. 

Of. Blok in den Bijdragen vow vaderl. geschied. 3, part, 124; and for 
later times the State Archives at Brussels, Chambre des Corn-pies, No. 434. 

Peri, II Negofante, about 1640, calls the Juros 'Una. gorte di pagamento date e 
ricevuto da qualoh' anni in qua per necessita.' 


We must now shortly discuss the practical significance of the 
ecclesiastical ban against interest on loans, towards the end of the 
Middle Ages. We most here make clear a point which has given 
rise to many errors, namely the relation between interest and 

The Practical Importance of the Ecclesiastical Doctrine of Usury. In 
spite of the ban of the Church interest-bearing loans had at the end of 
the Middle Ages been for centuries an everyday legal transaction. It 
was nevertheless regarded as a gross sin. In the Papal indulgences 
money gained through usury was put on a level with stolen goods. 
Jurisprudence also held strictly to this view. 1 Whether the 'usurers' 
themselves, that is the whole body of merchants, had uneasy consciences 
when they received interest, is not easy to say; but certainly this was 
true of not a few of them. In the twelfth and thirteenth centuries mer- 
chants often, or perhaps regularly, directed in their wills that their heirs 
should restore their gains from usury or should employ them for the 
salvation of the testator's soul. 8 By the end of the Middle Ages this was 
no longer a general custom. Even in the sixteenth century, however, it 
often happened that merchants took a legal opinion as to whether this 
or that undertaking was permissible under canon law. In the year 1577 
an agent of the Fugger in Spain writes of a Genoese Lazaro Doria re- 
cently dead: 'He was of so ticklish a conscience that he dealt not in bills 
or commerce against which the preachers and theologians here write and 
rage.' He had added in his will, where mention was made of the restora- 
tion of forbidden profits, that he had no load upon his conscience, for he 
had never had his own capital nor yet paid it into a business partnership, 
but had borrowed on bills all the money he had used for such dealings. 
The hair-splittings of the doctrine of usury had had such a distorting 
effect on the feeling of merchants, reputed conscientious, that they 
regarded it as a sin to 'commit usury' with their own but not with 
borrowed money. Nevertheless a f eeling of this kind did still exist, and 
even when the voice of conscience was silent people knew that the loan 
at interest was forbidden both by the ecclesiastical and the secular law, 
and that therefore law could not be invoked on behalf of the creditor. 
The doctrine, however, excepted from its ban the loans of princes and 
cities, declaring that such loans served the common weal. This, how- 
ever, was an uncertain reservation, and all 'usurers' moved, if not by 
fear of eternal punishment, then by the dread of losing their capital, tried 
to find a cloak for their operations. It was this that gave rise to the 

* Woker, Das HrM. Finanzwesen d. PSpste, p. 105. Endemann, Studien in der 
romaniach-kananiat. WirOuchafis- und RechtsleAre, H, 378 ff. 

Maiideffi,/f commune di VerceUHnelmedioevo, II, 135. A will of this kind occurs, 
e.g. Histor. pair, monvm. VI (Chart II), 829. 


many fine phrases used from ancient times down to the sixteenth, or 
even seventeenth, century in place of the objectionable word. 1 

Commerce of course found many ways of getting round the ban on 
interest. The interest was added directly to the capital, or in what 
appeared as a bill transaction the interest was smuggled into the price 
of the bills; or commodities were lent in place of ready money and then 
charged at a high rate; or the loan was made in the form of a deposit, 
which was permissible, and so forth. The Church and the Law recog- 
nized many of these forms, thus opening the door for the evasion of their 
own bans. The distinctions which were made were, however, so numer- 
ous and fine-drawn, and the views of the ecclesiastical and legal experts 
differed so widely as to what was permissible, that in the centuries be- 
tween the first lightening of the ban on usury and its removal by legis- 
lation commerce was never free from uncertainty. Owners of capital 
were always learning afresh from experience that this ban on usury 
would be involved by any debtor who could not pay, but more especially 
by bankrupt princes, not only to get out of their financial obligations 
with greater ease, but to give an air of legality to the proceeding. They 
knew moreover that this was passionately desired by all the prince's 
subjects who were not his creditors, and that the fact that a princely 
bankruptcy was a popular act made it so much the easier. 

These circumstances all combined to raise still further the interest en 
the princes' loans, which was in any case not low. This again increased 
the princes' financial difficulties and the popular hatred against the 
' usurers'. There was no escape from this vicious circle. This situation 
lasted in most countries throughout the sixteenth century. 

There was only one permissible form of credit business, and this was 
permissible because it was not considered as credit - the purchase of 
annuities. In the times when dealing in kind was lie prevalent system 
this custom originated from the necessity of finding a form for the 
alienation of rights to revenue in Mud, and with the development of the 
use of money the purchase of rentes became the most usual form for 
the investment of capital. At this stage it was not the need of capital, 
but the need of investment which was most powerful in making 
general the purchase of annuities. This can be proved from facts, 
but is quite obvious if we compare the purchase of an annuity with 
a loan. 

In the case where credit is sought and obtained, this is usually in the 
form of a loan where the lender reserves the right to demand the return 

1 A selection of these phrases: Latin: Luorum, flctum, damntun, interesse, don- 
tun, guiderdonum, remuneratio, premium, costamenta. Italian: Dono, prode, 
bene, guadagno, gracie, civanza. French: Don, frais, finance. English: Reward, 
interest, consideration, gratuity. German. Abnutzung, Verehrnng, Pension, etc. 


of his capital. In the case of a purchase of annuities, however, the 
lender expressly renounces this right. He buys an annual sum, and if he 
wants his capital back, he cannot apply to the recipient of the purchase 
money, but must resell the annuity to a third party. This important 
distinction made it possible for the Church to justify the principle of the 
purchase of annuities -a fact which strengthened its general popu- 
larity. 1 This could only come about because the need for investment 
was general and continually increasing among circles which were not 
accustomed, like the merchants, to lend and borrow at interest. Owners 
of capital who were not merchants only occasionally felt the need to 
raise capital and were usually concerned to find a profitable investment 
for it. What they wanted was not a' temporary investment like the 
merchants, but something permanent. This they found in the purchase 
of annuities. 

The chief sellers of annuities in the Middle Ages were the cities, whose 
credit, from the reasons we know, was so good that any owner of capital 
was glad to buy an annuity from them. Hence it arose that the annuity 
was at a lower rate of interest in the purchase price than the interest on 
loans, even when the loan was secured on real property and the annuity 
was not; for we shall see that the annuity loans of the cities as a rule 
were not secured on any particular property. 

The sale of annuities became very early for the cities, and later for the 
princes, a means of procuring capital for any special requirements. 
Annuity loans of this kind approximated, in fact, to ordinary loans; but 
in form they remained sales of annuities. The annuity was the return 
for a permanent and irrevocable transfer of capital, interest for a tem- 
porary and revocable one. The conceptions of interest and annuity were 
therefore distinct. 2 We shall discuss later how they were related in 

Loans of the Cities. Towards the end of the Middle Ages an increasing 
indebtedness descended on the cities as well as on the princes. The 
independent cities had not only to carry on many wars as they had done 
before, but had to put forth all their strength to resist the attacks of the 
princes on their liberty. The citizens had long ceased to take the field 
themselves, and the mercenary system was nowhere more fully developed 
than in the cities. The growth of the use of fire-arms had forced them 
to surround themselves with stronger fortifications, and their regular 
revenues, often very large, were never sufficient to produce the enormous 

* Endemann, La, H, 125, does not sufficiently stress this distinction. Of. for 
the opposite Bodin, Leg Six Livru de la Republiqw (1583), VI, 2. 

' This distinction TOM dra-wn even in the seventeenth century, and the commer- 
cial world. Of. Van Neulighem in his Boeckhouden (1630) distinguishes: 1. Geld 
op renten geven op huysen oft lant; 2. Geld op deposito oft interest geven. 

sums needed. The credit of the cities therefore was accordingly their 
most powerful weapon in the struggle for their freedom. 

Those cities, moreover, which had either lost their freedom or had never 
been free were forced by their lord to strain their credit ever increas- 
ingly for his benefit. It was, however, as we have seen, so good, and the 
need of an investment in the cities themselves so great, that they usually 
had little difficulty in satisfying their credit requirements. Only when 
the demand was very sudden and large, the cities also had to resort to 
forced loans, which were quite differently conditioned from those of the 
princes. They were assessed on the citizens like taxes; interest was paid 
and the public revenues were given as security. Nevertheless there was 
in later times an increasing disinclination to resort to forced loans, e.g. 
in Florence, where there had been frequent forced loans since the be- 
ginning of the fourteenth century, the historian Guicciardini at the be- 
ginning of the sixteenth century advised their discontinuance on the 
ground that they were tiresome and intricate and disturbed the city as 
much as new taxes. In place of 'them he recommended floating loans, 
anticipations, which cost more, especially if they lasted some time so 
that they had to be renewed several times. The fact, however, that the 
community had to raise a few thousand ducats was less' important than 
the discontent caused by taxes or forced loans. 1 

We must regard this as the view prevailing among those responsible 
for the cities' financial policy, for as a matter of fact forced loans lost 
their importance in the cities towards the end of the Middle Ages. The 
republic of Florence, if we keep to one chosen example, returned to them 
in the exigencies of its kst struggle. After the fall of the republic the 
Medici used them on a large scale, though now no interest was paid nor 
definite revenues given as security.* 

Apart from sudden demands for capital on an unusually large scale 
the cities were easily able to raise the capital they required by means of 
voluntary loans and sales of annuities. Indeed, so great was the dis- 
position to invest money with them that they often carried on a regular 
banking business. At the beginning of the seventeenth century George 
Obrecht writes: 'In our times certain cities borrow large sums of money 
at 5 per cent, and lend them out again at 8 per cent.' s 

The oldest city loans were everywhere floating loans, anticipations of 

Guicoiardini, Opere inedite, X, 351. He calls forced loans * Accatti universal! da' 
ricchi.' Originally every 'accatto' was a forced loan. 

1 Varohi, Stor. fiorent. ad. a. 1530. Alberi, Bdaz. d. ambasc. venet. H, 32 ff., 346. 
Reumont, Oesch. Tosbanas, 1, 114. 

' Obrecht, Polit. Bedencken und Discurs von. Verbesserung Land und Leut. 
1617, p. 128. For the fourteenth and fifteenth centuries cf. Schonberg, Finanz- 
wrhaltoiase der Stadt Basel, p. 102 ff . Kostaneeki, Der offend. Credit im MittdaUer, 
p. 41 ff. 


definite revenues. It had been the custom from early times that should 
these revenues prove insufficient, the whole city with all its citizens 
should be liable for the debt. 1 A development took place in two direc- 
tions: On the one hand, the floating debts were to an increasing extent 
replaced by funded loans; and on the other, the charge on definite 
revenues was abandoned and replaced by the primary liability of the 

Towards the end of the Middle Ages the sale of annuities in its various 
forms was the most usual method for the cities to raise capital. The 
annuities were mostly sold, to use the apt phrase of the Netherlands, 
'Opt corpus der stadt.' * Besides this, however, there were frequent 
cases of mortgaging definite revenues and real property belonging to the 
cities, even in the case of funded loans. This was even more frequent in 
the case of the floating debts which no city could entirely dispense with. 
Even Venice in the beginning of the sixteenth century had to resort to 
the pawning of jewels. At the end of the Middle Ages as a general 
rule princes raised money by anticipations and cities by the sale of 

The organization of the debts of the cities was naturally most highly 
developed in Italy. Great attention has therefore been paid to the 
Italian Monti of the Middle Ages, without, however, arriving at a satis- 
factory conclusion. An attempt has been made to import modern con- 
ceptions and classify the Monti accordingly. Were they state loans or 
banks, syndicates of state creditors and tax-farmers, or limited liability 
companies? The truth is that they contained the germs of all these 
modern arrangements, which developed from them at a later time. 3 

We cannot look for the chief root of the Monti in the tax-fanning 
system, which since Roman times had never really died out in Italy. It 
was already very general in the cities at an extraordinarily early date. 4 
The lease of the taxes was designated as a 'sale,' though the cities origin- 
ally never intended permanently to alienate their revenues. This came 

For example, Vercelli, Hist. patr. monum. VI (Chart II), No. 1516. Maneffi, 


, . . , . 

n commune di Vercdlind media evo, H, 104. Troves in Champagne. D'Arbois de 
Joubainville, Hietoire des Dues et des Oomtes de Champagne, IV, 729. 

'Optlichaemderstadf or 'op heure ende op alle heure ingesetene goeden,' or 

pour le corps de la ville et pour chacune maniere de gens non labourans et labour- 
ana,' GifflodtB, Inventaire, I, 389, Antw. Arck. Bl. 1, 36 fl. 

o, La critica etorica e gli studi intorno atte instituz. finanz. 1877. 

fc, Universalgesch. d. Handekrechts, p. 291 ff. Endemann, Stodien in d. 
roman. kanonist. Wirthsch.- u. SedUsleJwe, I. 431 S. Rezasco, Dizionario d. ling, 
italetor.ed amminiatr. s. v. monte, luogho, compera. Ceoohetti, La vita d. Venetian 
finoailZOO.p.nS. C^eo,Mem.sopral'anticodtibtiop^J>licodiOenoea. Lobero, 
Mem. utor. d. Banca di 8. Giorgio,' Lib. jur Oenuens. 1, 171, 176, 177 ff. 

For this farming-out system of the city of Genoa, see Liber, jur. Gen. I, 77, 
139, 141, 144, 159ff. 


about in the course of things. 1 The extraordinary requirements of the 
cities necessitated anticipations of the farmed revenues, which were 
regularly asked and granted at the time of the contract. Need of money 
once again brought about a renewal of the connection and the grant of 
further advances. Finally there was a definite funding of the floating 
debt. This also happened many times in the case of forced loans which 
it was not possible -or more usually, was not held expedient - to 
repay; a for the need of a means of investing capital, which we have 
already emphasized, made itself increasingly felt in the Italian cities. 

Originally the lease of the city revenues and the making of advances 
upon them was a commercial undertaking, which, however, could not be 
carried on by individual merchants on account of the large amount of 
capital required. It was accordingly necessary to form companies for 
this purpose. So, for example, the first voluntary loan we hear of for the 
Venetian Republic was taken up in the year 1164 by a company con- 
stituted as follows: two persons with two shares apiece, two with one, 
one with a half-share and two with a quarter-share; and it is possible 
that other unnamed persons may have been interested under the names 
of these chief partners. At any rate, this was so in later loans of a similar 
character. This method of participation was a favourite means of find- 
ing a safe and interest-bearing investment for the capital of the citizens, 
their widows and orphans, the Church, etc., which was not employed in 
trade. 8 

Meanwhile the Italian city states had consolidated their many float- 
ing loans into great Monti, either, as in Genoa, selling to the Monti for its 
own administration a portion of the state revenue, or, as in the case of 
most other republics, keeping the revenues themselves and giving the 
Monti a charge on some or all of them. The right to the repayment of 
the loans was reserved, but could no longer be demanded. The interest 
was for the most part reduced. 4 The persons who before had held sub- 
sidiary shares in the tax-farming companies were given equal rights with 
the rest, and became accordingly immediate creditors of the state. 
Their shares (Luoghi) were entered in great registers (Cartularies), 
could be inherited or sold and were subject to fluctuations of value in 

i Vgl Kezasoo, Dizionario d. ling. Ml star, ed amministr. v. comperare, vendere. 

1 The development prior to the fourteenth century is not clear. No consistent 
account exists of the origin of the Camera degli Imprestidi and the Monte veoohio 
in Venice and the Qfficium assignations mutuorum and the first consolidated 
oomperae in Genoa. Cf. the first monti in Florence. 

* In 1646 the Republic of Genoa reduced the rate of interest on the debt and 
deferred payment. It sought the sanction of the Pope for this because many 
Luoghi were in the hands of the Church (Cuneo, pp. 120, 298 ff.; Lobero, p. 159). 

For Genoa see Cuneo, pp. 26, 77, 124 ff.; Lobero, pp. 16, 93 ff. For Florence, 
>, p. 650. For Pisa, Morpurgo, p. 156 ff. 


accordance with the state's credit or the money market and the pre- 
valence of war or peace. In the case of the Monti carrying on their own 
business for profit the value of the shares also varied with the amount 
of the dividend. 

In Genoa there was the most highly developed system of partial 
obligations and shares. Here the Luoghi were always expressed in the 
same round figure, were a perfect fungible commodity like money and 
were often used, in fact, as a means of payment. 1 

Finally in later times the Monti were used, not only for permanent, 
but for temporary investment. Owing to the use of their shares as 
currency their character approximated to that of the Giro and Deposit 
banks with which they have often been confused. 2 The feature which 
distinguished from all other similar institutions of the Middle Ages was 
the stable organization which they placed at the disposal of the towns 
for the satisfaction of any extraordinary call for money and at the ser- 
vice of the capitalists for the investment of their free capital. 

Lenders of Money Capital. It came about early in the Middle Ages 
that rich monasteries, or even, in exceptional cases, secular loads and 
gentlemen, were able to lend money; 8 but the class which was first able 
to do this on a large scale was the merchant class. Long before this was 
necessary for tradesmen or landowners, merchants had had to keep at 
tkeir disposal money capital on a larger or smaller scale. This meant 
tkat they were disposed to lend this capital for other purposes if they 
could get a larger profit than in their own business, or obtained advan- 
tages which they required for their business. Hence the money loans 
wliiidk3feeity burghers made, not only to their own overlords, but also 
to tierulerfi-<rf the countries where they carried on business as foreigners 
for the sake ef obtaining rights and privileges, without which it was im- 
possible to live -seearely or to carry on an undisturbed and profitable 
trade. Originally be foeeigners had no rights, and the burghers, who in 
the first place were not *tl freemen, had even in their birthplace to 
struggle for centuries for their rights - the freedom of the city, the rights 
.of merchants.* 

In the Middle Ages only a part of the European merchant class en- 
gaged in moneylending as a trade. This was early taken up by certain 
classes of merchants, first of all the Jews. So long as they lived among 
Germanic races, the Jews had from early times always occupied them- 
selves first and foremost with trade. This they were forced to do, for 

Chiefly within the territory of the city. Of . Liber, fur. Gen. II. 471 , 498, 1076. 

Even Italians did this in the sixteenth century. Cf. Capmany Mem. I, 214; 
Narino Banuto Diarii, II, 377, 391. 

'Lamprecht, Deutsches Wirttechafaleben, I, 1446. Von Inama-Sternegg, 
Deutsehe WirOuchafttgeaMskte, II, 444 ff. 

Goldchmidt, Univeraalgeachictee des Banddsrechte 8. 112 ff. 


though for centuries they were allowed to buy land, yet in actual fact 
there was little room for them either in the old District Associations 
(Markgenossenschaft) nor among the great landowners, who were the 
ruling class in Carlovingian times. In the few towns of the early Middle 
Ages, on the other hand, the Jews occupied a highly privileged position. 
Their trade was indispensable to the German peoples, who had little of 
their own. 1 

Meanwhile, however, the Romans and the Germans had given rise to 
new peoples whose trade activities began to gather force from the ninth 
century onwards, especially since the epoch of the Crusades. The trade 
of South Germany developed in connection with this Eomanic move- 
ment, while in the north a further independent trading area was created 
by the Frisians and Saxons. The Jews ceased to be indispensable as 
merchants, while at the same time the Church let loose popular fury 
against them. They lost their privileged position, or rather they became 
dependent on the pleasure of the overlord, who could protect them or 
leave them in the lurch as suited his interest. They now first began to 
to occupy themselves with dealing in money. 2 

Here they occupied at first a position similar to that they had before 
in the trade in commodities. They were at first indispensable both to 
the people and more especially to the princes, whose need of money had 
increased greatly since the time of the Crusades. They were the first 
professional moneylenders of the Middle Ages. The princes often chose 
a shorter and cheaper way of using the Jews' capital: they confiscated 
their property. Other people who needed money could not use this 
method so frequently. On the occasions when this method was em- 
ployed, it was on a grand scale, the Jews were killed, their houses were 
plundered and burnt. Religious hatred here combined with the natural 
hatred of the oppressed debtor for his creditor. Persecution forced the 
Jews to buy the ruler's protection with new loans of money, in which 
they paid themselves for the great risk of loss by charging correspond- 
ingly high interest. 

The Jews were gradually driven from this position by the progress of 
the Christian merchants. The ban of the Church on usury had at first 
made professional money-lending difficult for Christians, while in prac- 
tice, if not in law, the Church had left the Jews a free hand for a long 
time, all the while, in fact, that it could not do without them. In the 

'Stobbe, Die Juden in Deutschland wahrend dee Mittelalters, S. 65. Gold- 
sehmidt, l.c. p. 108 ft Heyd, Geschichte d. Lewntehandds, French later Edition, 

The first general persecution of the Jews began in 1096. The first mention 
of their moneylending is in the year [1096. Vita s. Annonis (ca. 1100) Mon. 
Germ. S. S. XI, 602. Cf. v. Ihama-Sternegg, l.o. p. 445. Stobbe, p. 103 fi. 


course of the thirteenth century the Church learnt that it was more 
profitable in all money affairs to employ the Italian merchants who 
could serve them in recovering the ecclesiastical dues. The Papal col- 
lectors were the first professional Christian moneylenders. 

The inhabitants of the cities of Piacenza and Asti in North Italy, and 
of Cahors in Southern France, were the first who began to drive the 
Jews out of dealing in money in the regions north of the Alps. In the 
course of the thirteenth century they in their turn were replaced by the 
Tuscans, then by the people of Bologna and Siena, and later by the 
Florentines; but the name of Lombards or Caorsins still cling to all pro- 
fessional moneylenders who were Christians. 

The process by which the Jews were driven from the higher kind of 
money-lending - which alone concerns us here - took a very different 
course in different countries. In Italyitmust have been over so early that 
there is no historical tradition of it; perhaps there the Jews never played 
a leading part as moneylenders. In England, France and the Nether- 
lands they were driven out of the larger money business before the end 
of the thirteenth century. Throughout the larger part of North Ger- 
many in the Middle Ages they do not seem to have been tolerated. 
Their expulsion in South Germany and Spain was not completed till the 
end of the Middle Ages. At this time, however, the Jews in all the chief 
countries in Europe had sunk to be pawnbrokers and money-brokers. 
All the higher branches of the money business, especially financial deal- 
ings with princes, were in the hands of Christian capitalists. 

Among these the Florentines held the first place since the fourteenth 
century. Their inland situation put them at a disadvantage for dealing 
in commodities as compared with the cities on the sea. It was only in 
1421 that they obtained in Leghorn a serviceable port of their own, and 
they had hardly had time to make use of it when the Mediterranean 
trade began to decay. Therefore, besides silk and wool manufactures, 
their chief trade was dealing in money. They soon drove out of large 
international finance the inhabitants of the Lombard cities, and after 
them those of rival Tuscan cities (Siena, Lucca, Pisa). Their importance 
as financiers reached its first high-water mark in the first half of the 
fourteenth century under Philippe le Bel of France, and his three sons 
and Edward III of England. In both countries they were then econo- 
mically supreme. They overstrained their strength, however, and at the 
same time incurred popular hatred. 

A series of catastrophes overtook them. In 1339 King Edward III 
of England ceased to pay his creditors, among whom far the most im- 
portant were the Florentines, Bardi and Peruzzi. They in their turn 
suspended payments and brought down with them in their fall most of 


the other Florentine banking houses. 1 In Florence itself a rising of the 
Guilds in 1343 overturned the rule of rich patrician families, who were 
exiled and their property confiscated. This misfortune overtook them 
again two years later in France; and in England the resistance of the 
people against the Italian moneylenders grew in strength. 

In the subsequent long period of continued exhaustion on the part of 
Florentine finance, the Kings of England and France helped them- 
selves as best they might, mostly by means of forced loans from their 

The discontent thus evoked necessitated the return to voluntary loans 
at high interest, and now native merchants came forward as lenders of 
money in the grand style: William de;la Pole in England, and later, 
in France, Jacques Coeur. This was, however, only an episode. The 
native merchants were not nearly powerful enough financially, and the 
Florentines, who had now regained strength, once more had the upper 

The second great period of Florentine finance is associated with the 
name of the Medici. Three generations of this family had to collect 
capital and lend it out before they succeeded in getting the first place in 
their native country; and it was only in the fifth generation that their 
influence became powerful in the other countries of Europe. Averardo, 
called Bicci de Medici, who lived in the second half of the fourteenth 
century, had as yet no considerable property. His son, Giovanni, was 
always regarded by his descendants themselves as the founder of the 
family fortunes. 

Giovanni de Medici stood in close relation with Pope John XXII of 
infamous memory, whose money affairs he managed. Giovanni's son, 
Cosimo, accompanied the Pope to the Council of Constance. When Pope 
John was a prisoner in Germany Giovanni de Medici had him ransomed 
with 38,500 florins, gave him shelter in Florence, and when he died had 
him buried with great pomp. 

The often repeated assertion that the Medici owed their riches to the 
treasures left by this Pope has been disproved. When John, now merely 
Balthasar Cossa, died he left a considerable burden of debt, and the 
mitre which he had pledged to the Medici was demanded back from 
them under threat of excommunication by Pope Martin V. It goes 
without saying that Giovanni de Medici made a great deal of money out 
of his large dealings with the Curia, not only under John XXII, but 
also under his successor, Martin V, for the Medici seemed to have 
remained the chief bankers of the Curia till the year 1476. 

When Giovanni died in 1428 he left property amounting to 178,221 

1 Of. especially Anunirato, lator. for. 1, 496: '1'ultimo feUiaento de Bardi 

che quasi assorbi tutte le riochezze de private' 


golden. According to the tax lists there was only one citizen who had a 

larger income - Palla Strozzi. 1 

Under Giovanni's sons, Cosimo and Lorenzo, the riches of the family 
reached their highest point, for Lorenzo in 1440 left 225, 136 fl.; and 
Piero, Cosimo's son, left 237,988 fl. in 1469, so that their total fortune, 
about the middle of the fifteenth century, can be put at half a million 
gulden. Cosimo (Pater Patrise) had already begun to give effective sup- 
port to his struggle for political power by means of well-calculated muni- 
ficence. (This may even have begun in the time of Giovanni.) The 
family spent on public buildings, taxes and works of charity, between 
1391 and 1434, 36,000 fl.; between 1434 and 1464, 400,000 fl.; between 
1464 and 1471, 263,000 fl. Lorenzo the Magnificent, Cosimo's grandson, 
finally treated the state finances as his own and his own as the state 
finances. Because in this case the idea of making profit had become 
entirely subordinate, he could use his capital and the state credit all the 
more energetically for the attainment of political power. The Medici 
hardly ever had more influence over the course of the world's history 
than that which they exercised in the time of the struggles between 
Louis XI of France, Edward IV of England, and Charles the Bold of 

In Europe, towards the end of the Middle Ages, there were no 
financiers to compare with the Medici in international importance. 
Some other Florentine families like the Portinari, the Sassetti and the 
Guidetti were closely connected with the Medici both in business and 
in politics. Two families, the Pazzi and the Strozzi, who were repeatedly 
at variance with the Medici, played a considerable independent role as 
moneylenders; but outside Italy they were scarcely mentioned in large 
undertakings, and at this period only came in contact with credit- 
brokers of more or less local importance. 

This is also true of most of the banks in the proper sense of the word. 
Banking business had developed from money changing in Italy itself 
in the thirteenth century, and in many centres outside Italy in the four- 
teenth and fifteenth centuries. There were business men who made it 
their business to receive deposits either with or without interest, and 
acted as agents for payments in the market by giro transfers and for 
local payments through bills of exchange. These business houses, called 
'tabulae, tavole, banchi, bancherii,' from the pay tables indispensable in 
their occupation, used the capital entrusted to them in active credit 
operations; in addition, they usually traded in commodities on a more or 

1 Canestrini, La scienza e I'arte di stato, p. 153. Income tax paid 1427-32: 
Palla Strozzi, 507 fl., Giovanni de' Medici, 397 fl., Gabrielo Fanciatici, 391 fl. 


less large scale. Their credit business usually served the needs of their 
own market. The Florentines, whose banking had international impor- 
tance, were exceptional. Even they, however, carried on a considerable 
business in commodities, a sure sign that there was not yet enough 
money business to keep employed the capital - either their own or other 
people's -which they held. The demand for money capital had, how- 
ever, begun to grow rapidly, and the same is true of the holdings of 
money. Both, however, were spread over an enormous district with bad 
means of communication; and the few branches which the Florentines 
had outside Florence were insufficient to link together supply and de- 
mand. We see, accordingly, that the princes and cities everywhere, in 
the event of a call for money, put themselves into communication with 
any capitalists who happened to be at hand, or with agents of merely 
local importance, and borrowed capital from nobles, charitable or re- 
ligious foundations, clerics, officials, and burghers, the princes also 
borrowing on occasions from other princes, and a great deal from the 
cities. This borrowing was often in very small sums, and frequently on 
hard terms which did not always consist in the promise of interest in 

The princes, if they had money to lend - which was rare - the 
nobles, the charitable institutions, and the monasteries, gladly used 
opportunities of this kind to buy knd, which was mortgaged to 
them as a rule and redeemed; the cities, on the other hand, pre- 
ferred customs, the Mint, highways, and other royal prerogatives as 

But the clerics and, to a greater extent still, the burghers knew how 
to appreciate the advantage of interest in money, which came in as a 
sure regular income with no exertion on their part, whether called 
interest or annual payment, and whether the process by which it was 
obtained was called a loan or purchase of annuity. 

The rentier, towards the end of the Middle Ages, was a not infrequent 
phenomenon in the cities. Besides the corporations and foundations 
there were everywhere widows and orphans whose incomes consisted 
solely of annuities. It seems that in many of the cities of the Nether- 
lands, as early as the fourteenth century, the manual workers (Am- 
bachts-Luyde) nicknamed the rentiers as a class apart, Ledichganghers 
or 'the idlers.' 1 The chief families, apart from trade, lived on annuities. 
We know that the cities carried on a kind of banking business for this 
purpose, and we can easily see how they in this way collected capital, 

1 Annaka de to Sotitte d'emulation de Bruges, 1873, XXI. A Netherlands Mint 
order |of 1489 distinguishes Prelats, nobles, BENDERS, bons marchans. Of. 
Giffiodts van Severen, Invent, des archives de Bruges, VI, 495 (Verzeichniss von 
Leibrenten 1264-1332). 


not only from their own citizens, but also from those of neighbouring 
and friendly towns. 1 

Such an organization for dealing in capital soon showed its effect in a 
low and stable rate of interest. But even this organization was as yet 
very imperfect. It only served to bring together the monetary require- 
ments of the city community with the need of its citizens for an invest- 

There is to-day an economic institution which is used to organize both 
national and international credit, and puts all the many credit agents of 
the second and third rank into communication with one another. Such 
an institution, the capital exchange, was only present in the Middle 
Ages in a very rudimentary form. 

The Beginnings of the Capital Exchange. A bourse or exchange is an 
assembly meeting at frequent intervals, usually daily, consisting of the 
merchants and otter persons, who meet for the purpose of dealing with- 
out exhibiting, delivering and paying for their goods at the same time. 
Bourses or exchanges arose from a tendency inherent in trade from the 
outset to concentrate as far as possible, from the necessity of bringing 
supply and demand as far as possible together. This requirement had 
long before called into being markets and fairs. They, however, satisfied 
it far less perfectly than the exchanges, from which they were distin- 
guished in two important particulars. Markets and fairs - especially 
the latter, which are, practically speaking, alone important for trade 
on a large scale - occur at longer intervals than the assemblies of the 
exchange or bourse. Secondly, in these cases the commodities must 
regularly be taken to the place where the business is concluded and 
tested as to its quantity and quality, and finally transported to the dis- 
tricts where they are to be disposed of. It is evident that this procedure 
is a great hindrance to trade concentration, while the long intervals at 
which markets and fairs recur, though it calls forth trade concentra- 
tion, is at the same time a sign of a poor trade development. 

It is accordingly obvious that exchanges are a product of a higher 
stage of economic culture, and that they do not arise except under 

1 Of. for Bade, Schonberg, Finamverhaltnisse der Stadt Basel im 14. u. 15. Jahrh. 
p. 102 fi.; Mainz: Deutsche Stadtechroniken, Bd. XVII, p. 93 ff.; Hamburg: Kopp- 
mann, Hamb. Kammereirechnunffen; Ghent: Gaillard, Archives du conseil de 

, . , 

Flandre, p. 92, Rekeningen der Stad Gent, 1336-49, ed. de Fauw u. Vuylsteke; 
Bruges: Gilliodts l.c. Bd. I-VI, passim. Cf. Bibl. de I'Ecole des Charles, 1884, p. 
269 fi., Gaillard I.e., Gilliodts, 1, 5, 32, 67, V, 520, VI, 493. Geneva paid in 1480: 
10 Soudi 'duobus mercatoribus corrateriis (brokers) pro ipsorum laboribus et 
expends perquirendi in Argentina (Strasburg) pecunias mutuo secundum oonsue- 
tndinem patrie illus ad racionem de quinque pro centenario per annum, de undecim 
millibus ecutis tune ad solvendum restantibus quas reperierunt, eciam ad soiendum 
si peounie erant ad aliquid minus de quinque pro centum.' (Mem. delasoc. d'hit- 
toire de Qintoe, VDI, 430.) 


certain conditions. First, the wholesale trade must be so considerable 
that two or four fairs a year cannot deal with it. Next, the commodities 
must be so far standardized that they do not have to be seen at the time 
of the transaction. There is also a third factor. Exchanges and fairs 
presuppose a high degree of commercial liberty. Where these are only 

not a daily exchange can be formed. 

This already tells us that for the wholesale trade of the Middle Ages 
the fair was the characteristic form of business concentration, as the 
exchange is for the wholesale trade of modern times. There were, how- 
ever, exchanges in the Middle Ages, but they were not used for dealing 
in commodities, but in bills of exchange. Exchange of coins could never 
be the object of exchange (bourse) business in the proper sense. 

In order to conclude a bill transaction both parties needed an accur- 
ate knowledge of the currency conditions involved, and the bill buyer 
needed to be sure that the seller was a person of sound credit. All the 
other requirements of ordinary dealing in commodities are absent. The 
bill does not have to be transported, warehoused and inspected. At the 
beginning it was necessary after the preliminary agreement to register 
bill transactions before a notary. The trade in bills could accordingly be 
carried on in the fairs of the Middle Ages in the manner characteristic of 
exchange business; and in the markets where there was enough of it for 
the trade to be regular and continuous, real exchanges then arose. 

These fall into two classes in accordance with their origin, with per- 
haps an intermediate class. In the markets with a considerable home 
trade, especially in the trading cities of Italy, they arose from the 
business which developed at the banks of the money-changers native to 
the city, when the notaries likewise had stalls in the open air. Here 
there arose, on the one hand, money-changing to facilitate the local 
payments of the giro and deposit business; and, on the other, in order to 
facilitate payments between places near the traffic in bills of exchange. 
The latter, in the important markets, had the characteristics of ex- 
change business as early as the fourteenth century. 

The development was somewhat different in the markets without 
much home trade, where foreigners controlled most of the business and 
where, above all, the Italians had dealing in bills entirely in their hands. 
The fact that this form of business was introduced by them does not 
need further proof. In the countries north of the Alps bill business, 
therefore, developed in the closest connection with the factories of the 
Italians. The streets and market places where they lived, and more 
especially where they had their consular houses or Loggias, were the 
localities where bourse business first developed. Hence the bourse itself 
was often called Loggia or Loge. The present term 'Bourse' is taken 


from the square in Bruges, the greatest mediaeval foreign market, where 
the Florentines, Genoese and Venetians had their consular houses. 

In the markets of Southern Prance and Northern Spain, which al- 
ready had bourses in mediaeval times, these seem to have arisen partly 
from the concourse round the tables of the money-changers and partly 
to have been connected with the factories of the Italians. 

Like ordinary commodities and bills of exchange, capital to be lent 
can be an object of exchange, dealings in which always tend to have 
the character of bourse business. A bourse develops when the traffic 
is sufficiently important and when the capital to be lent takes on certain 
standardized forms. Neither of these factors were fully present in the 
Middle Ages, and therefore bourses, where capital was dealt in, were not 
then very important. Nevertheless, this form of business existed and 
took its rise from the bourse dealings in bills of exchange. 

The bill of exchange originally only served as currency, but it soon 
developed into a credit instrument. In fact the use of the bill as cur- 
rency is indissolubly connected with the credit given to its drawer; for 
if the drawer needed in market A money which perhaps was already in 
a distant market B, but could not be brought quickly and safely to A 
because of the bad communications and the dangers of the roads - a 
frequent case in the Middle Ages; or if the money was only ready at B 
one, two or three months later - as was the rule when the drawer of the 
bill had taken the initiative in the transaction - it is obvious that busi- 
ness of this kind is really a credit transaction. 

Transactions of the following sort were very common. In 1266 the 
Governor of Saint Louis of France in Palestine found himself in mone- 
tary difficulties. The King thereupon empowered him by a kind of letter 
of credit to borrow money and promised anyone who lent him this 
money, and presented the letter in Paris, to pay him the equivalent 
fifteen days afterwards, 'apud templum.' The governor then concluded 
with the Western merchants, or their agents in the Levant, a bill tran- 
saction, which was also a loan. 

Similar operations are also reported of Eichard Coaur de Lion and 
John Lackland in the twelfth century. 1 Quite at the end of the Middle 
Ages, ordinary credit business began to take on the form of bills in order 
to tree itself from the character of 'usury.' 

In short, wherever there was a bourse for bills of exchange, there 

*Btbl. de I' Me des ehartes, XIX, p. 116 ff. Papa d'Amico, / titoli di credito 
p. 69 ff. Bond in Archceologia, XXVIII, p. 216 fi. Cf. also Hufflard-Brfholles, 
Hist, docum. Fred. II. V. 385, 456, 471, 498, 549, 603, 605 3. Cecchetti, Vita 
dei Veneziani fino dl 1200, p. 72. Blancard, Docum. inedits, I, 403 fi., Arch. star, 
ital, Sec. 3. t. in, parte 1, p. 118. Scdta di curiositd letterarie, No. 116, p. 15. 


must have been a bourse for capital without our being informed of this 
in all instances. Reliable information in the absence of business docu- 
ments is extremely scanty. It is, however, established that in th& thir- 
teenth century the merchants had to maintain in many markets a sort 
of bourse for loan capital, both to meet their own requirements and on 
account of the needs of princes and cities. Prom this something similar 
to a 'market rate of interest' seems to have developed here and there. 

So in the year 1260 the Sienese trading company of the Tolomei writes 
to their agent, who was at the Champagne fairs, that they have sold bills 
in Siena for the next fair because in this way they could raise most 
cheaply the money they needed for prosecuting the war against Flor- 
ence. The letter adds that it was not so profitable to borrow in Siena, 
for the rate of interest for merchants to each other (da uno mercatante 
ad altro) was 5 or 6 pf . a pound (probably for two months, making an 
annual rate of about 12J per cent, to 15 per cent, a year); for people 
other than merchants, twice this rate; also that the sale of bills on 
England was not so good as bills on the Champagne fairs. At the same 
time the lords of the country, the Counts of Champagne, borrowed at 
the fairs, and the interest on these loans - which was high - was calcu- 
lated like commercial debts from fair to fair. An agent of Edward I 
reports that he had borrowed money for his master, in 1274, from a 
Lucca merchant in the Champagne fairs. Philippe le Bel borrowed from 
the Florentines, who themselves obtained capital on loan at the same 
fairs, He allowed the interest to be deducted on the loans contracted at 
the Champagne fairs 50 sous on 100 livres per fair (two months) the 
equivalent of 15 per cent, a year; and in the case of the other loans 
1 denier from each pound per week, 4 denier per month, 4 sous per 
year, or 20 per cent, per annum. All this already makes the impression 
of a fairly regular business in lending capital; as we are told that in the 
Champagne fairs there were special places for the money-changers, we 
must suppose that it was here that the business in capital was chiefly 
concentrated. 1 

We gather from Giovanni da Uzzano that the Florentines, in the 
middle of the fifteenth century, knew accurately when to expect the 
recurrent periods of tight and easy money in the various markets. Here 
it was not only trade conditions which came into play, but also govern- 
ment requirements, especially the pay of the soldiers. We get the im- 
pression of regular dealings in capital, which, however, were chiefly in 
the form of bill transactions or very closely connected with them. On 

1 Soelta di Curiosita Letterarie Lc. Arbois de Joubainvffle, Historie des Dw* 
de Champagne, IV, 840 ff. Bond, Archaxdogia, XXVHI, 273. Vuitry Etudes aw 
k Regime Financier de la. France, New Series, 1, 179. Bourquelot, Etudes swr k 
Foires de Champagne, II, 13, 129 fi. 


this account, therefore, it most have had the character of bourse 

We know also that the shares of the Italian monti were dealt in in the 
manner of bourse business. The fluctuations in the quotations were 
already considerable in the fourteenth century, and the larger extent of 
the transactions caused the introduction, both in Florence and Genoa, 
of a special turnover tax. Theologians and jurists disputed whether it 
was permissible to buy such shares below their face value, the Domini- 
cans in Florence declaring in favour of this proceeding, while the 
Minorites asserted the contrary. We must also remember that at any 
rate the Public Debt Office was in the market, the Kialto; and Luca 
Pacioli, in 1494, speaks expressly of the daily transactions which took 
place in the Rialto in shares of this Camera d'Imprestidi. 2 

Finally, from Bruges we have an example of a bourse transaction of 
the fiscal kind. It is not large and is not a loan proper, but a bill transac- 
tion. In 1475 the city of Bruges lent 908 10s. to 'Te Wissele Jegens 
Diversche Cooplieden ter Buerze.' 8 There cannot, however, have been 
regular direct dealing in capital on account of the city in the Bruges 
Bourse itself, or we should have record of more transactions of this kind. 

If we consider this scanty information, one fact is fairly clear. In the 
Middle Ages princes and cities - if we exclude Italian cities - could not 
cover their own requirements directly on the bourse, but needed mer- 
chants at any rate as agents. They, on their side, took advantage of the 
low market rate, but charged their debtors a far higher rate than those 
of the market or bourse. Only a small proportion of the loans of princes 
or cities had any relation to a money market. Most of them were trans- 
acted on their own, so to speak, from house to house. 

The capital bourses of the Middle Ages were only important for 
merchants. They were a convenience both to native and foreign mer- 
chants in certain markets in concentrating their trade in bills and the 
business in lending capital, which was closely connected with it. 

The far-reaching and international importance of the bourse is a 
modern product. 

Review of the State of Public Credit at the end of the, Middk Ages. At 
the Renaissance European culture turned from unattainable ideals to 
Nature and reality. The precept of the Church, 'Take ye not interest 
from loans," had proved impracticable, and experience had given the 

1 Uzzano in (Fagnini), Delia Decima, IV, cap. 47 u. 48. 

Luoa Paoioli, Trattato de' computi e delle scritture ed. Gitti, p. 77. Rezasoo, 
Dizionario Art. Monti. Cuneo, Banco di 8. Giorgio, p. 107 fi., 127, 180, 307. 
Canestrini, La scienza e I'arte di Stato, p. 424 fi. Fabronius, Magni Cosmi Medici 
Vita Adnot. 35. Villani, Star. for. lib. 3, cap. 106. Ammirato, Star. lib. 14. Ende- 
mann, Stodien, I, 434, 441 fi. 

* Gilliodts van Severen, Inventaires, VI, 82. 


principle, 'Money is the sinews of -wax,' such importance that finally a 
new political system, 'Mercantilism,' took its rise from it. 

In the last centuries of the Middle Ages the system of dealing in kind 
among the European peoples broke down in some places, remaining 
untouched in others. The public budgets of princes and cities showed an 
increasingly monetary character on the expenditure side, especially in 
regard to the largest item, the cost of the army. The receipts, on the 
other hand, in the case of the prince at any rate, continued to be chiefly 
in kind. General experience showed that it was impossible to increase 
receipts of this sort proportionately to the increase of the expenditure. 
They were, moreover, not generally available at the time and place 
where the expenditure had to be met. Hence the necessity for a large 
and increasing amount of credit, though this also presented considerable 

In many places, it is true, there were small amounts of monetary 
capital which the owners wished to invest. The sale of annuities by the 
cities also gave an opportunity of this kind without conflicting with the 
ban on usury. On the other hand, it was very difficult for princes in 
need of money to avail themselves of credit: first, because they had 
little or no personal credit, and also because the bad state of their 
revenue organization greatly restricted the use of real credit -i.e. the 
mortgaging of revenues -a disorder which at the same time had a 
ruinous effect upon their budgets. 

Ajbove all, the credit organization was, on the whole, very poorly 
developed. Commerce had made a system for itself, and in Italy there 
was already an elaborate system for satisfying the credit requirements 
of the cities and the need of investment on the part of their citizens. 

The princes, on the other hand, concluded their loans like private 
individuals with any owners of capital who presented themselves, with- 
out any systematic agency. To measure the advance of modern times 
in this respect we will state briefly how, towards the end of the Middle 
Ages, the individual princes of the more important states acted. It is, 
however, important to get rid of the idea that there is any definite line 
of division between the Middle Ages and modern times. Then, as al- 
ways, the different degrees of development co-existed, but the process 
whereby the more backward conditions gave place to others was then 
comparatively rapid. This is the characteristic of an age of transition. 

The simplest method of raising money for war, which is also the 
crudest and the most ruinous, was still employed towards the end of the 
Middle Ages by the chief secular lord of Christendom, the Emperor. 
Frederick III was a careful manager, but in this respect, as in all others, 
so limited and pettifogging that his economy was no good to him. In 
any case, hisTevenues as a feudal lord were inadequate, and as Emperor 


quite insignificant. He might have been able to increase his receipts 
from his own country by the use of greater energy and foresight. In- 
stead of this he believed, like the kings of the Old Testament, in the 
collection of gold and silver plate as a provision for the future. In the 
course of his long reign he must often have experienced the inadequacy 
of this method, for at every large call for money he had to resort to sell- 
ing or pledging offices, estates, annuities, etc., and, since he was never 
able to redeem his pledges, they became permanent alienations. He was 
perpetually in debt, not only to his own Diet, but to every kind of 
individual, clerics, merchants, Italians, and Jews, and he owed numer- 
ous sums, often quite small ones, to his own counsellors, court servants, 
and mercenaries, so that he was driven from one scandalous situation 
to another. 1 Under his son, Maximilian, matters were even worse. 
Whereas Frederick was a miser, his son was prodigal to the verge of 
madness. A contemporary Augsburg chronicler has left us a picture of 
the finances of the knightly Maximilian: 2 'He was pious, not of great wit, 
and was always poor. In his knd he had mortgaged many cities and 
castles, rents and rights (Giilten) so that he kept little for himself. He 
had knavish counsellors who ruled him in all things. They all became 
rich and the Emperor poor. If a man desired aught from the Emperor, 
he must give gifts to his counsellors, who thereupon brought it to pass. If 
later his opponent came they took gifts from him also, giving in return 
letters which said the contrary to the former ones. The Emperor suf- 
fered this to be so. He would always make wars and yet had no money. 
At times when he wished to set forth to war, his servants were so poor 
that they together with the Emperor could not pay their reckoning at 
the inn.' We shall learn later other details of this shameful form of 

Maximilian, in all his monetary difficulties, kept the collection of gold 
and silver plate which he had inherited, and even increased it by ex- 
pensive additions. Since, however, it was for the most part never out of 
pawn, he cannot have had much pleasure from it. He had, on the con- 
trary, to pay interest at usurious rates for the possession of this dead 
capital. Against this we must set off the progress in the goldsmiths' art 
which may have resulted from the Emperor's patronage. This primitive 
method of raising money ceased under Charles V-a few exceptions 
apart - chiefly because the loans to be raised on valuables were insigni- 
ficant in proportion to the enormous amounts of money now required. 

Cf. Chmel, OeschiMe. Kaiser Friedrichs IV, z. B. I, 403 ff., II, 106 ff., 173. 
Archiv f. Kund. osterr. GescMftsgvdlen, X, 183 ff., 370 ff. 

< Greiff in den Anmerkimgen zu dem Tagebwhe des Lucas Bern, p. 100. Cf. z. 
B. Brewer, The reign of Henry VIII, vol. I, p. 132 ff. Negoc. dipl. de la France 
avec la Toscane, II, 429, 513. 


Maximilian was as backward in his financial management as in all 
other respects, so that for him, as it had been for his father before him, it 
was a matter of insuperable difficulty to obtain financial grants from his 
parliaments, either the Imperial Diet or the diets of the separate states. 
Nobles and clergy contributed practically nothing to the regular state 
taxes. The city of Vienna brought in almost as much to the Emperor 
Frederick III as the whole of Styria. 

If, on the other hand, the diets were asked to grant extraordinary 
taxes, they haggled over every gulden, and in the end only granted 
the barest minimum in return for ruinous concessions on the side of the 
Crown. The Emperor could not dream of raising forced loans. Maxi- 
milian once attempted to raise one from the great trading companies, 
but had to give it up. 

The financial system of the kings of France was a very different story. 
There is a well-known saying of Maximilian's that he was a King of 
kings, for no man felt bound to obey him; the King of Spain was a king 
of men, for though people reproached him, they yet did his bidding. 
But the King of France was a king of beasts, for no man dared to refuse 
to do his bidding. 1 

Translate this into financial language. The French Crown had levied 
on its subjects, and the clergy also since 1438, a regular direct tax, the 
taille; it also regularly raised heavy dues from its feudatories, and even 
the greatest vassals were not quite tax free. The indirect taxes, though 
very, oppressive, produced an increasing yield. In the interests of defence 
or some other pressing call, it was not very difficult to obtain the grant 
of extraordinary taxation from the states general. Above all, towards 
the end of the Middle Ages the forced loan was a favourite expedient, 
especially a forced loan on the well-to-do. They grumbled, butwere com- 
pelled to pay, the methods employed being mediaeval, as we shall see. 

In U73 Louis XI, wishing to raise money in haste, demanded from 
Lyons - as well as from other cities - a forced loan of 20,000 livres, to 
be raised from the richest inhabitants, to whom the King sent a letter. 
The citizens thereupon met and recognized the King's need and the 
reasonableness of his demand, for it was in his power to take every- 
thing. 2 The sum, however, was too high. The city had already on 
several occasions made large advances to the King, whereof nothing had 
been repaid. Bargaining then began between the King's commissioners 
and the citizens. Finally they agreed on 8,000 livres, from which the 
commissioners, apparently without having powers so to do, remitted a 
further 2,500 livres. The King gave himself no further trouble as to the 

1 Ranke, Franz. Oeschichte, I, 125. 

"... que de son auctorit6 il pourroit prandre de fait, quant son bon plaiair 
seroit ainsi le fere' (Bibl. de I'ecole tea Charles XLHI, p. 462). 


manner of raising the money, he caied only about getting it as soon as 
possible. This all happened under the economical Louis XI. 

No interest was paid on forced loans, and they were often not re- 
paid. It was only in 1522 that the cities began to receive definite royal 
revenues for the interest on their compulsory advances. They, in their 
turn, sold perpetual annuities on these, and this was the beginning of the 
present French 'rentes.' 

In the case of voluntary loans at interest, to which the Crown only 
resorted in cases of extreme urgency, and which were, as a rule, on a 
very small scale, the financial officials at the King's direction put them- 
selves in communication with a business house, pledged revenues, and 
on occasion also jewels, or became personally liable both for capital and 
interest. In short, these transactions were still of a mediaeval type, and 
the French Crown at the end of the Middle Ages often had its policy 
checked from the want of a little ready money. 

The case was very similar with the loans of the English Kings. 
Forced loans played a chief part when Parliament was not sitting. In 
the letters under the Privy Seal which the King, in the event of a special 
call for money, sent to certain, or even many, capital owners, it is stated 
that the regular thing was in such cases for the Crown to demand from 
Parliament, should it be sitting, the grant of a general tax, that other- 
wise the Crown must be assisted by loans from individuals. This must 
be the case in the present instance, as the financial necessity brooked no 
delay. The King doubted not that the person named would show his 
loyalty by the advance of the sum demanded of him. 1 

Besides, there were also in England voluntary loans of Italians and 
others, but since the end of the Civil Wars these had been unimportant. 
Henry VII got together a large treasure which enabled his son to lend 
money not only to other princes, but even to merchants. 

Among the larger European countries, Castile was the one whose 
rulers at the end of the Middle Ages had far the best developed system 
of loans. The Crown there had actual annuity loans, as yet, however, 
funded on separate branches of revenue, not on the whole country. 
They were regularly used and were regularly dealt in. In 1438 the Par- 
liament demanded that the full amount should not be paid to persons 
buying up the royal annuities at much below par. In 1480 Queen 
Isabella revoked a part of the sales of annuities of her predecessor, 
Henry IV. She distinguished between the annuities bought at low prices 
and those bought at the right price, i.e. between those bought direct 
from the King and those obtained from third persons.* 

Of. Stnbbs, Constitut. History, m, 01, 253. 

. Cvlmeiro, HM. dela econom. polit.enEspana,!, 


There were also, of course, floating loans - those which Guicciardini, 
in an ambassador's report of 1513, called 'permute,' i.e. bills: though at 
that moment they were of subordinate importance in Castile. In 1489, 
when Ferdinand and Isabella were in pressing need of money for the war 
against the Moors, they sent invitations to all cities and also to numer- 
ous individuals, asking them to make advances. These were similar to 
those sent by the Kings of England and France, except that Ferdinand 
and Isabella granted 10 per cent, annuities for the sums so obtained. 
When this was no longer enough, the Queen pawned her jewels. 1 

In her last will, Queen Isabella advised her successors never to sell 
perpetual annuities, and ordered that all the free revenues of the king- 
dom of Granada should be applied before anything else to the repay- 
ment of the loans. These orders, however, were not carried out. Spain 
in the sixteenth century fell into a state of the most hopeless in- 

The Netherlands finance accounts give us a clear account of how 
floating loans were contracted at the end of the Middle Ages. 8 The 
Brussels Court, if any one, should have been able to get the advantage 
of bourse dealings for its loans. Instead of this, however, it borrowed, 
usually from the same Florentine merchants - mostly the Frescobaldi 
and Gualterotti, first in Bruges and then in Antwerp - larger or smaller 
sums, as required. It paid high interest and gave its creditors a charge 
for the repayment on available revenues. It took all possible guarantees 
from officials and citizens, and even pledged jewels. In urgent cases it 
did not HTirinlr from selling large parts of the domains to cities, nobles, 
churches, monasteries and private persons, though it would have been 
able to give instead annuities on the domain, or to have such annuities 
sold through the towns - a financial expedient which was actually used 
at the same time as the sale of the domains. 

In short, though the loan system of many princes towards the end of 
the Middle Ages had developed many new features, yet, even at its 
highest point of development, the system still showed a preponderantly 
mediaeval character. 

1 Colmeiro, II, 678. 

Gomptes de la recette gSnertde des linances (Archives departementales de Lille). 





ORIGIN and Beginnings. The Fugger did not belong, as did the 
Welser, the Herwart, the Langenmantel, and others, to the 'old' 
families of Augsburg. Their ancestor, Hans Fugger, came to Augsburg 
from the village of Graben in the year 1367. He was a weaver, but he 
also traded, and he left, what was a considerable fortune for those days, 
3,000 florins. 

A year after he came to Augsburg the Guilds obtained a share in the 
management of the city, which hitherto had been exclusively in the 
hands of the old families. The most distinguished Guilds were the 
Weavers and Merchants, and they accordingly profited the most by the 
change. Hans Fugger's sons were already respected members of both 
guilds, and one of them, Jakob, was Master of the Guild of Weavers, 
though he himself had ceased to weave. Other families, however, were 
rising in the world, and there is nothing to show that the Fugger were 
already specially prominent. Like most of the Augsburg merchants they 
still dealt exclusively in 'spices, silk and woollen materials,' a trade 
where long established relations with Venice as yet played the chief part. 
Andreas was the richest and most respected of Hans Fugger's sons. 
He married a daughter of one of the old families and was the ancestor 
of the Fugger vom Eeh, so called from the doe in their coat of arms. 
Some of his sons largely increased the scope of the business, and had 
relations with the Netherlands, with Leipzig, even, it is said, with Den- 
mark. Incautious giving of credit, however, proved their ruin,and when 
Lucas, the last son of Andreas, died in 1494, he left behind nun more 

1 There have been several attempts to write a history of the Fugger. 

1. A member of the family, Hans Jakob Fugger, composed in 1546 the Gehaim 
Srenbuch dea Fuggerischen, GescMechtes, of which the MS. [is in the German 
National Museum in Nuremberg. 

2. A MS. from the end of the sixteenth century, 'Cronica des Gantzen Fugger- 
ischen Geschlechtes.' 

3. A printed work, Fuggerorum el Fuggerarum Imagines, Aug. 1618. 

4. Pinacotheca Fuggerorum, Oct. 17,1154. Later works. Dr. Dobel, the Archivist 
of the Fugger Family Archives, published two treatises: 'Uber den Bergbau und 
Handel der Fugger in Karnten und Tyrol' and 'Der Fugger Bergbau und Handel 
in Ungarn' in Ztachr. d. hiator. Vereinesf. Schwatenu. Neuburg, VI, 33 ff., IX, 103 
ft. Cp. also Wenzel, A Fuggerek jdentosege Magyarorszag tarteneteben, Budapest, 
1882; Habler, 'Die Fugger und der spanische Gewttrahandel' in Ztechr. d. histor. 
Ver. f. Sdwaben, XIX, 25 ft.; and 'Die Finanzdekrete Philipps II und die Fugger,' 
Deutsche Zeitschr. f. Geschichteunssensdi, XI, H. 2, p. 276 ff. Aloys Geiger, Jakob 
Fugger, Regensburg, 1896. 


debts than assets. The branch of the Fugger vom Reh continued to sink, 
BO that many of them became handicraftsmen, or had to enter the 
service of their more fortunate cousins, the Fugger of the Lilies (Gilgen) 
as clerks. 

This chief branch of the Fugger von der Gilgen sprang from another 
son of the original ancestor, Jakob I, a modest man, who was, as we 
have seen, master of the Weavers Guild, but who was looked down on 
by his proud brother Andreas. He married a daughter of the master of 
the Augsburg Mint. This man, Basinger, had 'great business with every 
kind of merchant,' and in 1444, when his debts amounted to 24,000 
florins, had to cease payment. His son-in-law went surety for him and he 
compounded with his creditors, who got 75 per cent, of their claims. 
He then went to Tyrol and once again became a mint master, this 
time in Hall, the centre of the growing Tyrolese mining district. Appar- 
ently it was through him that the Fugger had their first connections 
with the Tyrolese mining industry. 1 

Jakob II. When 'Old' Jakob Fugger died, his sons, Ulrich, George, 
and Peter, carried on the business. Two other sons had died before their 
father, and two more, Marcus and Jakob, were intended for the Church. 
In 1473 Peter also died, and on the request of Ulrich and George, Jakob 
abandoned his clerical career and became a merchant. The family came 
rightly to consider this a great stroke of luck; for Jakob 'the second' 
showed a real genius for business, and it is almost entirely to him that 
the Fugger owe their importance in the world's history. 

Jakob Fugger was just fourteen when he became a merchant in 1473. 
He learned his business, like many other young South Germans of that 
day, in the great business house of the Germans in Venice, the Fondaco 
dei Tedeschi, where his elder brothers had a permanent warehouse. 
When he became a partner and the three had carried on the business 
together for some time, they made an agreement that their male heirs 
and descendants should leave their property in common in the business, 
but that the daughters should be given money down in dowries 'so that 
the Fugger business may remain in every wise undivided.' 

This principle was observed as far as possible as long as the house 
prospered, and it was only given up after the war of Schmalkalden. Of 
the three brothers, George died first in 1506, and Ulrich followed him 
four years later. Jakob, who had no children of his own, then took his 
nephews, Hieronymus, Ulrich, Eaymund, and Anton, into partnership. 
He managed the business, which was now styled 'Jakob Fugger and 
Nephews,' till his death. 

Neu> Business Methods. When Jakob II entered the business the 

1 Cf. for BiUingen Die Chroniken d. devtscben Stddte; Augsburg, II, 99 fi., D. 
Archiv. f. Gesch. u. AUerth.-Kunde TiroU, V, 50. 


Fugger's trade had not yet struck out into new paths. It is true that as 
early as 1473 Ulrich Fugger had done business with the Hapsburgs, but 
this transaction was still on the old lines. In the year 1473 the Emperor 
Frederick III was preparing to go to Trier to make an agreement with 
Charles the Bold of Burgundy as to the marriage of his son Maximilian 
with Charles's daughter Maria. For this expedition the Emperor 
wished his train 'to be habited in plain coloured cloth and furnished 
forth right merrily, and Ulrich Fugger was commended to him by the 
Chancellor, Hans Bebwein, as an honest and sound man to furnish His 
Majesty with good cloth and silks.' Ulrich Fugger lived up to this de- 
scription, 'whereon the Emperor made him as a free gift without pay- 
ment his coat of arms of the lilies, and this' - Hans Jakob Fugger says 
in conclusion - 'was the first Trade and Businesse which the Lords of 
Austria had with the House of Fugger.' 1 This transaction did not, 
however, lead to a continued connection. This began first at the time 
when the silver mines of the Tyrol were becoming increasingly impor- 
tant, and under Maximilian I the Hapsburgs' struggle to obtain the 
position of a world power made itself openly felt. The Fugger, who knew 
how to forward this effort, then entered on their period of importance in 
the world's history. 

It was not, however, Ulrich Fugger who brought new undertakings of 
such wide scope into the business. It was, as the oldest family records 
show, Jakob who had left the trade in spices, silks and woollens,and had 
'betaken himself to various undertakings of greater profit, such as bills 
of exchange and mines.' The first beginning of this kind had been made 
as we have seen by 'Old' Jakob in the middle of the fifteenth century. 
The first decisive movement in this direction, however, was in 1487, 
when Jakob Fugger the Second - we do not hear of any one else - to- 
gether with the Genoese Antonio de Cavallis, advanced the sum of 
23,627 florins to Siegmund, Archduke of Tyrol, who in spite of his rich 
silver mines was always in dire straits for money. They received as 
security a mortgage on the best of the Schwatz silver mines and the 
whole province of Tyrol, under which, if the money were not punctually 
repaid, the silver due from the mines to the Archduke should be handed 
over. The next year, 1488, saw business on a still grander scale. The 
brothers, Ulrich, George, and Jakob Fugger, advanced to the Archduke 
150,000 florins, and till this debt was paid the whole silver production 
of the Schwatz mines had to be handed over to the Fugger at a very 
low price. 

i This tale is told in the greatest detail by Hans Jakob Fugger in an MS. of 
1566, in Kgl. Staatsbibl. in Munich (I, 319), and more concisely in the Gehaim 
Erenbuch dea Puggeri*-ken Qeactteckta. 


It was through transactions of this kind that the mines which the 
Fugger themselves owned in Tyrol and Carinthia 1 became increasingly 

Similarly in Hungary the trade in copper, which the Fugger had 
begun in 1495, was soon extended by working the large copper mines in 
Neuflohl and elsewhere. In this case the Fugger were helped by the 
influential Austrian family of Thurzo, with whom they often inter- 
married. In the years 1498 and 1499, they, together with other business 
houses in Augsburg, formed powerful syndicates to get control of the 
copper market in Venice, while at the same time they shipped Hun- 
garian copper through Danzig to the Netherlands. As early at any rate 
as 1494 they had a connection with Antwerp. 

Business wtih. the Emperor MaxmiUm I. When in 1490 Archduke 
Siegmund handed over the government of Tyrol to Maximilian I, the 
latter, who was the worst manager of all the Hapsburgs, immediately 
approached the Fugger for a loan. This happened for the first time in 
1492, a year when Maximilian was so hard pressed, owing to the cessa- 
tion of the English subsidies, that he could not pay Duke Albert of 
Saxony the sums promised to him for the military service he had ren- 
dered. It is uncertain whether the Fugger did as Maximilian wished 
and made fresh advances on the Tyrolese silver production. In any case, 
in 1494 they had still a claim of 40,000 florins on the silver. Nevertheless 
Maximilian tried to pledge the Tyrolese silver production yet again to a 
Nuremberg consortium under Heinrich Wolff. The Fugger meanwhile 
declined to release their mortgage, and the Nurembergers had to content 
themselves with a bad security. 8 

The Fugger at this time were still remarkably cautious about satisfy- 
ing Maximilian's perpetual claims. When, however, his need was most 
acute, they gave in. In 1496, when there was no money for the expedi- 
tion to Italy and even the loyal cities of the Empire, in spite of the most 
urgent entreaties, would lend nothing to the King on the security of the 
Poll tax, 'Gemeine Pfennig,' the Fugger lent 121,600 florins on the 
security of the output of the Tyrolese copper mines. They deducted 
from this almost half to satisfy their remaining claim on the silver, and 
as the State Government kept back a further large sum for its own use, 
the warlike Maximilian was to find himself left with only 13,000 florins. 
Finally, however, the Fugger agreed once again to lend him 27,000 
florins on the silver. 8 

The war with Switzerland in 1499 once again rendered acute Maxi- 

Of. for the Fugger business in Carinthia, the Tyrol and Hungary, Dobel and 

Of. Chmel, Urk. e. Gesch. Maximilians, L p. 41 ff. 

Chmel Lo. p. 96. Ulmann, Kaiser Maximilian I, vol I, p, 438 fi. 


milian's chronic money troubles. After ceaseless efforts on the part of 
the Emperor's trusted servant George Gossembrot (whom we shall hear 
more of), the Fugger declared themselves ready to make a fresh advance 
on the Tyrolese copper. Shortly afterwards Gossembrot came into 
violent collision with the Fugger, who wanted to have sole control of the 
copper market, and the syndicate in which he was interested had to 

Trade in silver and copper was in these years certainly the Fugger's 
chief occupation since the feudal lord's share of the copper and silver 
production had always been the best security the needy Hapsburgs 
could offer. This it was too that made the Fugger, who could not tear 
themselves away from the profitable copper and silver trade, more and 
more the most important helpers of Maximilian in his money difficul- 
ties. This became apparent during the Ten Years War in Italy (1508- 

When in the summer and autumn of 1507 Maximilian asked the 
Imperial Diet at Constance for the grant of a general tax of the Empire 
for the Eoman expedition, the States at last declared themselves ready 
to give him 12,000 men and to raise 120,000 florins by taxation. For 
the moment, however, this was no good to the King, for the Imperial 
taxes came in slowly, while cash was immediately necessary to pay the 
Swiss 'Die Freien Knechte der Eidgenossen,' who otherwise would have 
gone over to France. 1 

The Diet at Constance recommended Maximilian to raise a loan from 
the great business houses. This came to nothing, as did the attempt to 
get prepayment of subsidies from the Italian cities which were expect- 
ing armed help. The King's credit was nil, and even the Fugger would 
lend nothing except on a mortgage of the Crown lands; for he had no 
other security to give. In July, 1507, Maximilian had to bring himself 
to mortgage his revenues as Count of Kirchberg and Lord of Weissen- 
horn to the Fugger for 50,000 florins. The mortgage was never redeemed, 
and these lands, apart from a few older parcels of land in Graben and 
Augsburg, form the beginning of the Fugger's afterwards very extensive 
possessions in real property. 8 

This money was a drop on a hot stone. In his extremity the Em- 
peror bethought him of turning to account the growing feeling against 
the great business houses. He attempted, against the advice of the Diet, 
to raise a forced loan from the business houses in Augsburg, Nuremberg, 

i Maximilian wrote to his daughter Margaretha about the Swiss: 'II sount 
medians, villains, prest pour traire France on Allemaignes.' Cf. Janssen, Frank- 
furter Beichscorrespondenz, II, 712 &., 741, 745. 

> Cf. Report of the Venetian envoy Quirino from Augsburg (Alberi, Bdaz. d. 
ambasc. venet, XIV, 28 ft.). 


Memmingen, and Ratisbon. All the firms resisted to the uttermost. 
They made use of Dr. Conrad Peutinger as their agent with Maximilian, 
and after months of fruitless negotiations, the companies advanced 'a 
mighty sum,' apparently 150,000 florins, but once again on the Crown 
land. The King, moreover, had to bear witness that this was a volun- 
tary act and to promise never again to try to impose a forced loan. 
The Fugger bore a large share of this loan. 1 

The year 1508 saw further advances made by the Fugger; a small 
advance of 8,000 florins on the right to farm salt ('Salt Meieramt') at 
Hall in Tyrol in January, later another of unknown amount on a large 
and valuable collar, and yet a third of 128,750 florins on the security of 
the copper and silver production. 2 

The League of Cambrai gave the Emperor -he attained this title in 
1508 - the promise of large subsidies from his allies, 170,000 ducats in 
all. The payment had moreover to be made at the most widely distant 
place, Eome, Florence, and Antwerp, and was very slow, while Maxi- 
milian as usual required money immediately and the whole amount in 
Germany. Jakob Fugger was able to get the money to Augsburg, some 
in a fortnight and the rest within six weeks, by means of bills of ex- 
change. A bill transaction on such a scale between such distant locali- 
ties, carried through in such a relatively short space of time, was 
regarded in those days as a great feat. The fame of the Fugger grew 
mainly through business of this kind, which they carried on later on 
an even larger scale. Without running any great risks they were able 
to make a large profit from a skilful use of the price of bills - 'arbitrage' 
as it is called now, 'cambric arbitrio' in the language of that time. 3 

In 1511 the Emperor conceived the crazy notion of making himself 
Pope. The idea itself and the plan for its execution are very characteris- 

His agent Paul von Lichtenstein was to borrow 300,000 ducats to 
bribe the Cardinals from Jakob Fugger. He was to pledge as security 
'the four best caskets with Our jewels together with Our robes of state.' 

1 Cf. for the negotiations about the Forced Loan cf. Jager, Vim im MtitdaUer, 
p. 677, Herberger im Jakresber. d. hisfor. Ver. f. Schwaben, Neuburg, 1849-50. 

1 Le Glay, Corresp. de Maximilien et de Marguerite d'Autriche, 1, 177, and also 
Dobel, Zwschr. d. histor ver. /. Schwaben, IX, 199. 

Cf. Hans Jakob Fugger's Spiegel der ehren de* Ententes Osterreich in der 
Ausg-des Sigm. v. Birken. 1668, 12, S. 9, and the rather different version of 
v. Stetten, Geschichte der Augsbg. GeseMechter, p. 202. In 1609 the 'marchans alle- 
mans nommez les Fouekers, demourans en la ville d'Anvers' (Comptes de la Tre- 
eorerie de la guerre 1306-11 und Camples de la Recette generale des Finance* 1510, 
Archives de la Chambre des oomptes in Lille) make a first appearance in the 
accounts of the Court of the Netherlands. 

4 Cf. Goldast, Polit. ReUhsMndel, XII, 4, p. 428, and Geiger, p. 22 ff . 


The interest was to be 100,000 ducats for which Jakob Fugger was to be 
given a lien on: 

(1) The Imperial subsidy 'the which we will obtain in the next Diet 
from the States of the Realm.' 

(2) On subsidies and taxes in the future on the Austrian Crown lands. 

(3) On the annual Spanish subsidies. 

(4) Should all this prove insufficient the Emperor will assign a third 
of all the revenues he will draw from the Holy See in order to pay the 
debt. Further, he undertakes to appoint any one whom Jakob Fugger 
shall designate as the keeper of the Imperial treasures. The Fugger 
bank in Rome is to pay over the loan to the Emperor's envoys, so that 
they can use it as they want it. Lichtenstein is to spare no pains to 
bring about the loan, 'and though the Fugger deny more than once, 
still shalt thou trye yet again.' 

The whole business throws light on the adventurous fancy and un- 
scrupulous policy of Maximilian's oddly compounded character; and it 
is also an important piece of contributory evidence as to the election of 
Charles V. Needless to say, it all remained a pious wish. 

In spite of these unbusinesslike attempts to bleed them, the Fugger 
apparently lent the Emperor money in the years following, but we have 
no further information till 1514. In that year Jakob Fugger lent the 
Emperor 12,000 florins on the revenues of Tyrol, and 32,000 florins on 
the security of the lordship of Biberbach. When in October, 1515, 
Maximilian pressed him for a new loan Jakob Fugger replied that 'in 
past time and in this very year he had advanced great sums, close upon 
300,000 florins to His Majesty on silver and copper, whereof the greater 
part had not been repaid.' After the loan which as a loyal subject he had 
at great pains to himself made to His Majesty but lately on his journey 
from Vienna to Augsburg, he had not thought hi so soon to be en- 
treated for a new loan. The King's silver was pledged already for seven 
and eight years to come and the copper for four years. The getting of 
silver had sunk to the half, whereby the repayment of the debt was 
mightily delayed. He knew not how long he had to live now, nor how 
he should stand by reason of the wars a few years hence. He had be- 
sides much business and such increased unto him daily, wherefore 
those came to him at home whom in years past he had gladly ridden to 
seek. Nevertheless he quit himself of them, for he was now of a good 
age and had no child. He would therefore content himself with his busi- 
ness as it was and undertake nothing new. 

Only after much persuasion Jakob Fugger consented once more to 
advance in conjunction with the Hochstetter 40,000 florins on the 
security of the Schwatz copper for the years 1520-1523 at 4J florins the 
hundredweight; and in addition as 'a favour' on each hundredweight 


of silver 5 marks of silver at the price of 8 florins 27 crowns the mark. 
Finally Jakob Fugger consented to a further loan of 10,000 florins on 
the security of silver and the grant of customs privileges. 1 All this 
shows two things, first that the Fugger remained in close connection 
with the Emperor, and secondly that their position was now very 

At this point we begin to hear of fairly large financial transactions on 
the Fugger's part in Antwerp. Hitherto the factory there (which first 
had a house to itself in 1508) had really only been used for dealing in 
commodities, a business where pepper figured alongside of copper and 
silver. In 1505 the Fugger had shared in a large undertaking of German 
and Italian merchants in the East Indies, but this does not seem to have 
been repeated. Nevertheless they kept their own agent in Lisbon, and 
he made at regular intervals large shipments of pepper to Antwerp, 
where the Fugger played a leading part in the pepper market for several 
decades. 4 

In 1515 the Emperor was granted a lump sum of 100,000 florins in 
return for releasing his grandson from his tutelage and thereby ceased to 
interfere in the government of the Netherlands. The Fugger agency in 
Antwerp was commissioned to receive this money. Soon after they acted 

In this matter the Florentine Frescobaldi had played the chief part at 
first, but as they proved unequal to the task the Fugger had to step in. 
In April, 1516, they advanced 20,000 florins to the Emperor through the 
Cardinal von Sitten, and in May the Frescobaldi, who had failed to send 
the money punctually to Trent where the Emperor lay with his army, 
were themselves driven to borrow 60,000 florins from the Fugger. 
Maximilian's credit, whether financial or political, had now fallen so 
low through the failure of the English subsidies and his own heedless- 
ness that the English envoy could write home that the Emperor be- 
haved like a boy in his nonage. It was this very envoy whom Maxi- 
milian asked to assure Jakob Fugger that the friendship between the 
Emperor and the King of England was as firm as ever and that the 
Bong would continue to support the Emperor. 5 

In the summer of 1516 the Court of the Netherlands borrowed from 
Bernhard Stecher, the Fugger's agent in Antwerp, for the period of one 

1 Dobel,Lc. IX,200ff. 

'Augsburger StadtarcMv, Herwartiana Suppl. HI. 

1 Factory is used in the eighteenth century sense of a depot. 

For details of the Fugger factory of. Thys, Histor. d. stratum v. Antwerpen 2. 
Aufi. (1893), p. 548 ff. Antwerp f actors of the Fngger were: 1507 Conrad Meuting 
(Mutinck), 1610-13 Felix Hanolt, 1513-20 Bernhard Stecher, 1517-22 Wolff 
Haller, 1521 Anton Hanolt u. s. f. 

Brewer, Calendar of State Papers, voL H, No. 2310, 1231, 1384. 


year under the guarantee of the city of Antwerp, 27,000 pounds at 40 

pfennigs of Flemish money (i.e. 27,000 Carolus gulden). 

For this the Fugger received 3,000 pounds in interest, about 11 per 
cent., no means a high rate for those times. The agent received in 
addition 100 pounds for his trouble and expenses. At the end of the 
year the repayment of capital and interest was found impossible on 
account of the large expenditure for Charles' projected journey to take 
over the government of Spain, the war in Friesland and so forth. 
The loan, which now with accrued interest amounted to 30,000 pounds, 
was prolonged from Midsummer Day, 1517, till Christmas in the follow- 
ing year. The Fugger meanwhile had other outstanding claims on the 
Emperor for 42,000 pounds, making a total of 72,000 pounds. When 
the loan was extended, the Antwerp agent, Stecher, received a further 
100 pounds from the Finance Ministry of the Netherlands. Finally to 
end the story of the Antwerp business we should mention that the 
Fugger in 1518 lent 38,000 pounds in order to pay the Frisian garrisons 
for three months and to meet other pressing needs. For this loan several 
receivers-general of provinces and cities had to make themselves per- 
sonally responsible. The interest was 4,000 pounds for thirteen months, 
or not quite 10 per cent. 1 

The Finger and the Reformation. The next great dealings of the 
Fugger with the House of Austria refer to the time of Charles' election 
as Emperor. Before we enter on these, we must turn to the connection 
between the Fugger and the Boman Church. 

They had a factory in Eome which Dr. Christopher Scheuerl speaks 
of as early as 1500 as 'the Fugger Bank,' and by its means they had large 
financial dealings, not only with the Papal Curia, but with individual 
princes of the Church. They were interested in the lease of the Papal 
Mint, and when a prominent cardinal died in 1505, it was said that Jakob 
Fugger had large claims against him. In 1507 Pope Julius II had de- 
posited 100,000 ducats in their bank in Borne and in 1509 he had the 
monies produced by the Year of Jubilee paid in to them. 

In the year 1510 they sold to this Pope at the price of 18,000 ducats 
a diamond which they had had to take over at 20,000 ducats from the 
liquidator of the Venetian banking firm of Agostini. The Fugger were 
the first and with the Welser the only German firm which f ell into the 
old category of merchants called in the Middle Ages 'Campsores 
Bomanan curiam sequentes.' 2 

1 LiUe, Camples de la Becette Generate dee Finances. Of. Brewer Lc. No. 2721, 
2866 and -passim. 

'Pauli, Mb. Zustdnde im Mittdalter, H, 106. Reumont, Gesckichte der Stadt, 441,IHb, 398, 423. Marino Sanuto, Diarii, VI. 231, VII, 197, VIH. 
11, 87, X, 283. Janssen, Frankfurter Reichscarrespmdem, II, 762, 


In this way the Fugger became connected with Albrecht of Branden- 
burg when he was made Archbishop of Mainz. At least since the be- 
ginning of the fourteenth century the Archbishops had had to pay the 
Curia in hard cash for their confirmation and the sending of the episcopal 
pallium. Albrecht had to pay 30,000 ducats, most of which he first had 
to borrow. On the day following his consecration, the 15th May, he 
wrote an acknowledgment of indebtedness in which he acknowledged 
that Jakob Fugger had lent him 21,000 ducats for defraying these ex- 
penses and had paid them over to the new Archbishop's representative 
in Borne through his agent there. Albrecht promised to repay this loan 
at the term in good Flemish gulden at the rate of 140 gold gulden for 
100 ducats as well as 500 Flemish gold gulden for 'Trouble, Danger and 
Expense. 9 1 The usual periphrasis for interest. 

From his regular revenue the Archbishop would never have been able 
to pay back such a sum. He therefore obtained from Pope Leo X, on 
payment of another 10,000 ducats, the right of being General Commis- 
sioner for Saxony and other parts of Germany of the new Jubilee Indul- 
gence which the Pope had just declared. It seems that the Fugger helped 
in this arrangement, which for them was merely a means of getting their 
money more quickly. At any rate there is no ground to transfer the 
indignation against the traffic in indulgences to the Fugger. The whole 
business had been quite usual with bankers in Italy for centuries and 
the trafficking which appeared so markedly in Germany at the time of 
the Indulgence had been described, for example in Florence, as early as 
the fourteenth century. Then, too, honest men had denounced it with 
righteous indignation. The only novelty was that the man who now 
roused the whole people against the Indulgence should call forth a 
general response. 

The Pardoner Tetzel was accompanied everywhere by an agent of the 
Fugger, who kept in his hands a key of the Indulgence chest. , When the 
chest was full, it was opened in the presence of the Fugger's agent and 
its entire contents were then paid over to him and sent to Andreas 
Mattstedt, the Fugger's agent in Leipzig. Finally half the proceeds 
were paid over to the Curia by Engelbert Schauer, the Fugger's agent 
in Home, and the other half was used to pay the instalment of interest 
and capital due on the money lent to Archbishop Albrecht. Such was 
the business which led to the Reformation.* 

The Fugger's fortunes were now climbing faster and faster towards 

i Hennes, Albrecht von Brandenburg, 8. S B. Korner, Te*d der Abktssprediger, 
S. 44 S., 61 S. CL Woker, DM kirchliche Finanzwxen der Papete, S. 99 ff. 

For Engelbert Schauer cf. Loose, Anton Tuckers HaiuhaUungabueh, S. 124, 
150, S. 24; Both, Geschichte dee Nurnbg. Handels, I, 369 ft, He is here called 
Angelus Saur. 


the zenith. The moment approached when they threw their gold into 
the scales in the straggle for the first place between the Houses of the 
Hapsburgs and the Valois and thereby gave the Hapsburgs the crown of 
King of the Romans. 

The Fugger and the Election of Charles V as Emperor. The election of 
Charles of Spain to be King of the Romans is the event of this age which 
most clearly illustrates the power of money and is sufficient in itself to 
justify the phrase 'the Age of the Fugger.' The German Electoral 
princes would never have chosen Charles had not the Fugger helped his 
cause with their cash, and still more their powerful credit. This is evi- 
dent throughout the whole transaction. 

The Emperor Maximilian spent his last years in indescribable straits 
for money. In 1518 Jakob Fugger had to lend him 2,000 florins, and 
again, as the result of ceaseless pressure, another 1,000 florins, because 
otherwise His Majesty would literally have had 'nothing to eat.' This, 
however, did not prevent the Emperor at this very time from helping 
his grandson's election as Emperor by every means in his power and 
especially by large promises of money. He could not, of course, engage 
money of his own, nor yet directly money belonging to his grandson, but 
he could offer the promises of the Fugger, who in their turn lent their 
signature, not to Maximilian, but to his far more solvent grandson. 

The Fuggei had already had many money dealings with Charles when 
he ruled only the Netherlands. The Fugger's Antwerp agent, Wolff 
Haller, must even then have been in high favour with the young Prince 
and his counsellors, for Charles declared afterwards that when he took 
over the government of Spain (in 1517) he had received most important 
services from Haller and also at the time of the election as King of the 

As Haller, we know, made a journey in 1519 from Antwerp to Spain 
to carry out some large monetary transaction between the King and the 
Fugger in connection with the election, it is probable that he had acted 
for the Fugger in these dealings, a fact which would explain the great 
affection with which Charles continued to remember him in later years - 
in 1526 he speaks of him as 'Our Counsellor from Our youth up.' 

Of these first negotiations we know no details, only the result. In 
August, 1517, when Charles was setting out to Spain, he gave his envoy 
Courteville and the Imperial Treasurer Villinger bills on the Fugger for 
94,000 florins in order to bring the electors to elect him. This, however, 
was no use, for the money was to be paid after the election. The old 
Emperor knew better. He wrote to Charles that there must be immedi- 
ate payment in cash and not 94,000 florins, but 450,000 florins in addi- 
tion. Then began a bargaining which lasted for years with each separate 
elector, a proceeding made all the more scandalous by the fact that the 


electors kept raising their terms owing to the French King's candida- 
ture. 1 

When Charles declared that he wished to become King of the Romans, 
cost what it might, Francis let it be known that he was prepared to 
spend on it half his year's income, which was thought to be three million 
livres. Francis was no despicable rival, though less dangerous than his 
own skilful boasting made him appear to his contemporaries. His 
situation with regard to ready money was far less brilliant than his 
envoys and friends boasted, and he would have had great difficulty in 
paying his engagements, had he intended to pay them, which he did not. 
The German electors, however, had no use for such promises, they 
wanted money down, or else the guarantee of first-rate German mer- 

King Francis first approached the Republic of Genoa for a loan of 
80,000 scudi. In view of Genoa's wavering position between the two 
great camps in Europe, we cannot wonder that this was refused. He 
had no greater luck with an attempt to raise a large loan in Lyons. 
The money of the Florentines who set the tone for Lyons was not then 
as it was afterwards at the disposal of the French Crown. Indeed some 
of the most important Florentines who had their main business in 
Antwerp even supported Charles. It was only from his mother, the rich 
Duchess of Angouleme, that Francis received any considerable sum of 
money, but this was not nearly enough to decide the election. 8 

Charles meanwhile discovered even richer sources of money. As a 
result of Maximilian's advice he looked out for fresh means, and as the 
Fugger's terms proved too hard, he entered into relations with other 

In September, 1518, negotiations were carried through in Antwerp 
with the great Florentine banker Filippo Gualterotti. At the same 
time or shortly after relations were established with the most important 
Genoese merchants and with the next largest firm to the Fugger, the 
South German house of Anton Welser and Company, who sent to Spain 
two special representatives for this purpose, Heinrich Ehinger and 
Sebastian Schopel. 8 

These negotiations were concluded at the beginning of January, 1519. 
The Welser contributed 110,000 florins as well as 25,000 crowns. 
Filippo Gualterotti, 55,000 florins, the Genoese Benedetto and 
Agostino Fornari, 55,000 florins ; and another Geonese firm Agostino 
and Nicolo de Grimaldi and Company (who were represented by 

Gachard, Kapport sur Us Archives de LiOe, p. 149, 162; De Quinsonas, Mar- 
guerite, d'Awtriche, H, 256. 

Marino Sanuto, Dion*, Vols. XXVI and XXVH passim. Casoni, AwaaK di 
Genava, p. 66. Brewer, Calendar, HI, 84 and 116. 

Of. Brewer, Calendar, H, No. 4440. 


Lorenzo Vivaldi), 55,000 florins. They all gave the Spanish Government 
bills on Augsburg and Frankfurt am Main pledging themselves to pay 
over the amount of the bills during April either to Charles' new special 
representative Paul von Armstorffer, or according to Armstorffer 's direc- 
tions to the German electors, only, however, in the case that Charles 
should be elected King of the Romans. Paul von Armstorffer himself 
took the bills to Germany and handed them over to Jakob Fugger to 
keep for the time being.* 

Meanwhile negotiations with the German electors continued. They 
were going favourably for Charles, but were by no means concluded 
when on 12th January, 1519, the Emperor Maximilian died. 

King Francis now redoubled his promises, causing the electors and 
their counsellors (who also had to be bribed) to increase their demands 
on Charles. These to his sorrow he was forced to concede, for as we see 
from his letters the crown of King of the Romans grew in importance in 
his eyes as its price rose. 

At this point the extent to which the Fugger backed the House of 
Austria becomes evident. Charles' representative reported over and 
over again that the electors would only sell their votes for cash or the 
Fugger's promises to pay. 8 Francis, therefore, tried at first to bring 
them over to his side. He had the Fugger asked to accept a bill of 
300,000 ecus for him, and as Jakob Fugger told one of the Spanish 
representatives at the end of February he could have been able to make 
30,000 florins over this transaction. But the Fugger wished, as the 
Dutch Finance Minister Hoochstraten said in their praise, to remain 
'good and loyal subjects of Our Lord the King.' Probably also the 
security offered by Francis did not seem good enough. In any case the 
result of their reflections was unfavourable to the French. 3 

In February, 1519, the Hapsburg party in the Empire was very 
nervous lest the South German merchants should transfer their good 
offices to the King of France. 

The Swabian League then wrote on 16th February to the Council of 
Augsburg that it had learnt that certain foreign Kings, the King of 
France amongst others, had sought to obtain bills from the companies 
and merchants. As this was in the interests of the opponents of the 
Alliance, the Council were to forbid the merchants to undertake such 
business on pain of death. The merchants moreover were to declare on 
oath what had already taken place in the matter. The Council imparted 
the contents of the letter to the merchants, who answered that of late 

* See Jakob Fugger to Paul v. Armntorffer, Feb. 11, 1519 (Archives of German 
Nat. Museum). 

Letter of the Envoy to Charles in the State Archives in Lille. 

Mone, Ameiger, 1836, Sp. 36. Le Glay, Corresp. de Marguerite d'Autriche, H, 


they had done no business of this kind with the King of France; certain 
of them moreover, both shortly before and after the Emperor's death, 
had refused the request of the French King to accept bills for him. 1 
Nevertheless the merchants were still not considered perfectly safe. 
They were, therefore, expressly forbidden to undertake business in bills 
for the French, whereupon one of Charles' election agents wrote home 
that now through the help of the Fugger and the Swabian League the 
French Court could get neither credit nor bilk. A few days later, how- 
ever, the Statthalterin Margaretha wrote from Brussels to Charles that 
some merchants wished to pay only after the election and reserve them- 
selves the possibility of using the money in certain eventualities for the 
King of France. It is expressly stated of the Welser that they seemed 
to wish to withdraw from the business on the plea that war had broken 
out between Nuremberg, where they had an important branch, and the 
Margrave of Brandenburg. 2 

Even though it proved possible to keep the merchants to their pro- 
mise, French competition continued to drive up the price of the crown. 
In the beginning of March this was only a little over 500,000 florins, 
and of this amount only a very little remained to be raised. A few weeks 
later, however, Charles' agents had to report that a further sum of 
220,000 florins was necessary. Charles at first was very unwilling, the 
whole business seemed to be getting too expensive. Finally he gave in 
and again applied to the Fugger for new loans. 3 

Jakob Fugger moreover was not by any means always ready to 
satisfy requirements on this increasingly gigantic scale. He found at the 
same time that he was asked to lend hundreds and thousands of fresh 
money, comparatively small old payments due to him remained in 

He repeatedly complained of this as well as of many other wrongs he 
suffered. He was so indispensable that it was necessary to meet his 
wishes. Finally the Fugger lent the whole sum on bill acceptances and 
notes of hand given by Charles, who wished at all costs to become King 
of the Eomans. 4 As all this did not satisfy the greed of the electors and 
one of them, Joachim of Brandenburg, really did go over to the French 
at the eleventh hour, the total loan now rose to over 860,000 florins, of 
which the Fugger lent 543,000 florins, the Welser 143,000 florins, the 
Genoese and the Florentines together 165,000 florins. The merchants' 
acceptances were handed over by Charles' representative piecemeal in 

lAugsburger Stadtarchiv, Litieralien. (Le Glay, Nfgoc. diplomat. II, 244, 322. 
vgl. damitauch, II,302ff.). 

1 Mone, Anzeiger, 1836, Sp. 36. Le Glay, Negoc. dipl. II, 316 fi., 322. 

Mone,l.c. 1835, Sp. 286, and imprinted letter in Lille Archive* Sannto(2?taw, 
XXVH, 252). Le Glay, Ntgoc. dipt. II, 288. 

Le Glay, Negoc. dipl. 1, 220, II, 264, 437, 445. Mone, Anzeiger, 1836, Sp. 27-32. 


return for the votes. This with many other curious details appears 
from an account bearing the title 'Expenses incurred by the Emperor 
Charles V for his election as King of the Romans.' It is neatly drawn up 
with entries for the electors with their counsellors and servants and 
their many other princes, counts, and other nobility. A considerable sum 
is spent for the upkeep of the Spanish Commissioner and his train, and 
for the Wiirttemberg War, the Swabian League, Franz von Sickingen, 
etc., this entry amounts to 171,360 florins. Then come the previous 
advances that year of Jakob Fugger and Hans Paumgartner with the 
addition of 30,000 florins for interest, then the monies paid to the cities 
of the Empire, officials of the Court and so forth, 29,000 florins for pay- 
ment of the Swiss mercenaries, and finally 17,500 florins difference in 
exchange to the Fugger and the Welser. Charles' envoys dealt so open- 
handedly with money that they scarcely noticed that while repayment 
was demanded from them in effective gold gulden, the merchants had 
only engaged in Flemish gulden, so that there was an agio of 2 kreuzer on 
each gulden. 1 The whole bill was paid in an honest and honourable 
way, Charles covering a small deficit from his own resources. He was 
now King of the Romans. The electoral act itself with its ceremonious 
speeches was only a comedy meant for the people. 

In the last hour before the decision a very characteristic difficulty had 
arisen. The German princes refused the acceptances of the Italian 
merchants, who on their side would not deposit cash with the 
Fugger, on the ground that the Fugger had tried to spoil their business. 
Finally the matter was settled by the Welser going surety for the 

When the news of the election reached Augsburg, some of the most 
prominent citizens, Jakob Fugger among them, wanted to light bonfires. 
As this had never hitherto been the custom, the Council preferred to do 
it at the expense of the city. 

'There were many hidden charges therein,' says the chronicler, 'that 
shot of! in the fire. It was right fairly done and cost much money.' 
This might have been said of the election itself. Charles had reached his 
goal, but was it worth such a heavy sacrifice? One of his most active 
agents had written to him at the last moment that it was true the votes 
cost much money; on the other hand, they would give great security and 
quietness to Charles' rule in all his states. There has never been a 
greater political mistake. The Roman crown proved itself in every 
direction a fatal gift to its wearer. 

Charles' election brought considerable expense for the splendours of 

'Graff An Jahresberichte d. histor. Vereins f. Schuabm und Neubnrg 1868, 

' Le Glay, Negoc. dipL H, 336 fi. 


his coronation progress to Aix and the coronation itself. 1 This, how- 
ever, was a small thing in comparison. It was far more serious that the 
people of Spain showed no inclination to pay the price of the Crown, and 
when Charles' ministers tried to exact payment immediately after 
Charles' departure the fearful revolution of the citizens broke out, one of 
its main causes being the large export of money. * The worst effect, how- 
ever, of Charles' election was that it brought -him the undying hatred of 
the French King, and with it a series of wars which, though they brought 
Italy under Hapsburg influence, led to the loss of Metz, Toul, and 
Verdun, cost Charles' subjects streams of blood, and made Charles him- 
self even more incurably bankrupt. Immediately after the election his 
finances were so exhausted that he could not meet a great part of his 
engagements and could still less arm against his defeated rival who was 
pushing on to war. Francis outbid him for the Swiss mercenaries, and 
also drew over to his side a mass of German troops. 3 

Some German princes who had contented themselves with the guar- 
antee of the cities of Antwerp and Mechlin for the payments promised 
them by the Emperor, had to come upon their guarantors, who did not 
pay. Hereupon the princely creditors sent challenges to the cities with 
threats against their lives and property. The cities in their turn com- 
plained to the Emperor and he, having great need on his own account of 
Antwerp's powerful help, took some time to raise the money to satisfy 
the claims of the most influential of the German princes, the Archbishop 
. of Mainz. 

The Count Palatine, on the other hand, could not obtain payment, 
and other German princes fared no better, a fact which loosened their 
dependence on the Emperor and in many cases helped on open re- 

Charks V and Jakob Fugger. The business houses which had helped 
Charles' election and had promptly discharged the engagements it had 
entailed were to find that the Emperor broke his solemn promises to 
pay. In the beginning of the year 1521, in the Diet of Worms, he made 
an agreement with Fugger under which their claim was transferred in 
part to Tyrol and in part to Spain. At that time he received a large new 
loan from the Welser. A few months later, in order to raise money for 
the French war, there were large sales of Crown property both in Naples 
and in the Netherlands which he had lately occupied. It was the Welser 
who bought the largest share. Next year also, though large amounts of 
money were raised in the Netherlands, Spain and Germany and sent to 

i Lille Ghambre dcs Comptes, B. 2294. 

1 HSMer, Die unrthschaffliche Blithe Spaniens in 16. Jahrhundert, S. S3, An m. 13. 
Baumgarten, Qeschickte KarU 7, t. II, 28 ff. (Lanz, AktenstScke, S. 453). 
Lanz, Correspondent Karle V, 1. 1, 123, 129 fi., 453. 


Italy fox tlie maintenance of the Imperial forces, these proved insuffici- 
ent, and the payments to the merchants fell increasingly into arrears. 1 

The Emperor's credit was so bad in 1522 that Lucas Bern, who was 
interested in Jakob Fugger's large advances to the Emperor to the ex- 
tent of 18,310 ft., would have been glad to sell his share at half price. 
The Fugger in March, 1523, had received very little of the claim of 
415,000 fl., for which they had been given a charge on Tyrol; and, more- 
over, nothing had been paid on the claims transferred to Spain amount- 
ing to 152,000 ducats, which, including interest and new advances, 
leached the total of 198,121 ducats at 375 maravedis to the ducat. 

At last Jakob Pugger lost patience, and he wrote a letter to the 
Emperor which will be noteworthy for all time as evidence of the tone 
in which a merchant - the foremost of his time, of course - dared to 
adopt towards the most powerful monarch of his day: 2 

'Your Imperial Majesty doubtless knows how I and my kinsmen have 
ever hitherto been disposed to serve the House of Austria in all loyalty 
to the furtherance of its well-being and prosperity; wherefore, in order to 
be pleasing to Your Majesty's Grandsire, the late Emperor Maximilian, 
and to gain for Your Majesty the Roman Crown, we have held ourselves 
bounden to engage ourselves towards divers princes who placed their 
Trust and Reliance upon myself and perchance on No Man besides. We 
have, moreover, advanced to Your Majesty's Agents for the same end a 
Great Sum of Money, of which we ourselves have had to raise a large 
part from our Friends. It is well known that Your Imperial Majesty 
could not have gained the Roman Crown save with mine aid, and I can 
prove the same by the writings of Your Majesty's Agents given by their 
own hands. In this matter I have not studied mine own Profit. For had 
I left the House of Austria and had been minded to further France, I had 
obtained much money and property, such as was then offered to me. 
How grave a Disadvantage had in this case accrued to Your Majesty 
and the House of Austria, Your Majesty's Royal Mind well knoweth.' 

We do not hear how Charles took this letter, which was delivered to 
him in Valladolid on 24th April, 1523. At any rate, it did the Fugger no 
lasting harm. In the subsequent years the repayment of these loans 
made more progress, though in 1530 there were still 112,200 fl. owing on 
the 415,000 fl. charged on Tyrol. In the meantime the Fugger had 
Tendered many new services to the House of Austria. 

The year 1524 brought great vicissitudes in the state of the Emperor's 

1 Spinelli in Brewer, Calendar III, App. 22. For 1622 of. Lanz, Correspondent 
Karla V, t. I, 70 ff. 

* For Lucas Bern of. T. Greiff in Jahresber. d. histor. Ver. f. Schwaben 1860, p. 
73. For Jacob Fugger's letter see also von Greiff, Lc. 1868, p. 49. 


finances. At the beginning of the year his lack of money and credit 
reached such a pitch that even in the Netherlands he could raise no new 

In the spring there was a distinct improvement for no very obvious 
reason. The complaints of the princes whose payments were in arrear 
were, it is true, particularly loud, but the armies in Italy and the South 
of France - Bourbon was besieging Marseilles - had plenty of money as 
late as August. Probably the Fugger had already provided money under 
the Spanish agreements, which we shall discuss later. At the end of 
August, however, means gave out altogether, and the army before Mar- 
seilles was in great straits. 1 

The position was identical with that of Maximilian before Milan in 
1516. Now, as on the former occasion, negotiations were carried on with 
Henry VIII of England about the payment of subsidies. Now, again, 
the fact that the subsidies came too late caused the hasty withdrawal of 
the Emperor's forces. Thereupon King Francis descended suddenly on 
Italy and took Milan. 

In February, 1525, the famous event occurred which appeared so 
brilliantly to justify Machiavelli's dictum that it is easier to get money 
with soldiers than soldiers with money. The Emperor had in Northern 
Italy a splendid army, but it had received no pay for three months, and 
was in such straits that it must either be disbanded or attack. The 
Emperor's marshals chose the latter alternative, and their success 
equalled their hopes. The battle of Pavia was fought, King Francis was 
taken prisoner, and money poured in from all sides. The King of Eng- 
land, the Republics of Genoa and Venice, the Pope and the Duke of 
Milan paid rich subsidies to the Emperor who had so suddenly risen to 
power. 2 

Throughout this period the Fugger are rarely mentioned in connec- 
tion with the Imperial finances, and in the succeeding years the 
Emperor's policy, which was entirely centred on Italy, seems to have 
drawn Mm to the Genoese rather than the South German merchants. 
The point, however, which we have now reached is most important 
for the relations of the Fugger with the Hapsburgs, for now began 
their lasting connection with Spain and Naples. 

/Spain. In the year 1524 the Fugger for the first time took a lease, for 
the three years 1525-7, of the revenues of the Spanish Crown from the 
three great ecclesiastical Orders of Knights - those of Sant Jago, Cala- 

Baumgarten, GeaMMe KarU V, vol. II, p. 236 ff., 269. Brewer, Calendar IV, 
421, 463, 610, 589, 607, 761, etc. (Betgenroth, Calendar II, 651, 662). 
' ' See Brewer, Calendar IV, Nos. 1064-1237. Cf. also ViUa, Italia desde la 
bataUa de Pavia hasta el saw de jRbmo.pp.29, 73. Lanz, Coirespondenz, I, 162. 
G. de Leva, Star, doeum. di Carlo V, t. II, 238 ff. Baumgarten, Geschiekte KarU V, 

n, P . 29iff. 


trava and Alcantara - whose Grand Master was the King of Spain. 
With a few interruptions the famous lease of the Maestrazgos was in the 
Fugger's hands for more than a century. It formed the basis of their 
enormous Spanish business. 

The leased revenues consisted chiefly in dues in money and kind from 
the lands of the orders. Later, the products of the quicksilver mines of 
Almaden and the silver mines of Guadalcanal were added. The Fugger 
had temporarily to take over the management of the mines as well as of 
many of the farms. In order to collect and manage revenues and pro- 
perties - both extraordinarily various and scattered profits and pro- 
perties - the Fugger kept representatives in the different districts under 
a chief agent at Almagro. Later on there was also at the Court a per- 
manent agent, who was chief director of all the Fugger business in 
Spain. A particularly experienced man was always put in this post, 
which was both difficult and of cardinal importance for the fortunes 
of his employers. 

It has been asserted that the Emperor intentionally drew the Genoese 
and the Fugger into Spanish affairs in order to chain them indissolubly 
to the fortunes of his house. This is not impossible, and in any case cir- 
cumstances always tended to make the Fugger increasingly dependent 
on the state of their Spanish business. 

The annual rent which the Fugger paid for the Maestrazgos was at 
first 135,000 ducats, or about 50 million maravedis. At the end of the 
first three years their total profit for the period was put at 2,200,000 
maravedis, which, if correctly stated, was scarcely sufficient to pay in- 
terest on the capital. Nevertheless, the Genoese made a bid of 10,000 
ducats more for the annual lease. This time, however, the newly dis- 
covered quicksilver mines were included. 

The Genoese accordingly obtained the lease for five years, during 
which the rent amounted to about 54 million maravedis. The Maes- 
trazgos then returned to the Fugger, who held the lease until 1634, with 
the intermission of the years 1557 to 1562, and perhaps also of the years 
1615 to 1624. The rent for the period 1538-42 was 57 million maravedis; 
for 1547-50, 61 million; for 1663-72, 93 million; for 1573-S2, 98 million; 
for 1583-94, 101 million; from 1595 onwards, 110J million. The lessees 
always had to prepay the rent often for several years ahead. Perhaps 
this was what happened in 1524 when the Fugger first took over the 
Maestrazgos, a fact which would explain the sudden, though tem- 
porary, cessation of the Emperor's money troubles. The Maestrazgos 
certainly served at that time to pay off the part of the old election debt 
which had been transferred to Spain. 

Naples. The same time saw the beginning of the Fugger's lasting con- 
nection in Naples. It was, however, not the Emperor's finances, but 


those of his brother Ferdinand that gave the first impulse to this exten- 
sion of the Fugger's business relations. 

In 1521 the Emperor had transferred to Ferdinand the rule over the 
German dominions and with it a heavy load of debt dating back to the 
time of the Emperor Maximilian and the election of Charles. The 
revenues of this most important domain, Tyrol, had been in great part 
mortgaged to the Fugger for years ahead. Ferdinand, nevertheless, had 
to raise money for his brother for the war with the Turks, the suppres- 
sion of the peasants' rising and many other pressing needs. He tried 
on all hands to raise money. His brother supported him by handing 
over important revenues in Naples which he could mortgage to the 
Fugger. They lent him accordingly, in 1524, 25,000 fl. and 20,000 
ducats, and the next year 59,562 ducats. 1 Later, they had engagements 
in Naples for large amounts, sometimes as much as 400,000 ducats. 
The delays in repayment in Naples, however, always caused them great 
annoyance, so that in 1546 they cut their losses, and their rivals the 
Genoese held the field. 

Jakob lugger's Death. His Importance. About 1525 the Fugger were, 
beyond dispute, the most influential financiers of their time. Their bus- 
ness relations reached from Hungary and Poland to Spain, from Ant- 
werp to Naples. In the words of the contemporary chronicler of Augs- 
burg, Clemens Sender, 'The names of Jakob Fugger and his nephews 
are known in all kingdoms and lands; yea, among the heathen also. 
Emperors, Kings, Princes and Lords have sent to treat with him, the 
Pope has greeted him as his well beloved son and embraced him, and the 
Cardinals have risen up before him. All the merchants of the world have 
called him an enlightened man, and all the heathen have wondered 
because of him. He is the glory of all Germany.' 

At this high-water mark of their development the Fugger were to learn 
the constant peril of their position. In June, 1525, the machinations 
of their enemies caused them to be accused of delivering basemetaltothe 
Royal Mint; and at the order of King Ludwig their mines, their stores 
and other property were seized, and their people put in prison. Though 
Anton Fugger was able to disprove these charges and toannultheconfis- 
cation, the Fugger lost over this affair more than 200,000 gulden.* 

It is undeniable, moreover, that the Fugger in many countries were 
hated by the people. Envy and misunderstanding contributed not a 
little to their unpopularity. In popular language their name was used as 

Oberleitner im Archiv. f. Kunde dOerr. GeschicTUsyieUm XXII, 19, 22 of. 
Augsberger Stadtarchive Herwarth. Collect. Suppl. Band II, 414. 

' Of. Dobel, Bergbau und Handel der Fugger in Ungarn (Ztschr. d. histor. Ver. 
f. &sft*6e u. Neuburg, Bd. VI) S. 42. Wenzd, A luggerek jdentostge Magyarors- 
zag torteneleben, p. 28 ff., 138 ff., 1476., 166. 


a generic term for a great monopolist. The Fucker, Fokker, Fucar, and 
so forth, have ever since become in many different countries the name 
for the financiers which the people held responsible for every evil. 

Jakob Fugger, the man to whom the Fugger owe their greatness, died 
on the 30th January, 1526. 1 He is depicted as a handsome man, clean- 
shaven, wearing, as in his portraits, a cap of cloth of gold. He was of a 
merry disposition, pleasant to every one. Though modest in his bearing, 
he was on occasion a plain speaker, even to the most highly placed. He 
himself had few wants, but was hospitable in the grand style of his age 
and position. He gave many mummings, skating parties and dances to 
the most select society of Augsburg, the Herrentrinkstube. He would 
have rebuilt this clubhouse if he had been allowed to add the Fugger 
coat of arms. He was a true son of his time in his love of building. He 
had one of the existing Fugger houses in the Winemarket built and 
decorated with the utmost splendour. He had the church of St. Ann 
enriched with splendid statues and erected a wonderful family tomb. 
When, however, this church came into the hands of the Lutherans, he 
asked his nephews to have him buried elsewhere, for he was a good true 
Christian and quite against Lutheranism. He also contributed largely 
to the building of other churches and founded them on his own account. 

The best known of his many charitable works is the Fuggerei alms- 
houses. A significant trait is his proposal to the Augsburg City Council 
that it should make an arrangement (no details of which are given) 
whereby the sheaf of rye should never cost the poor man more than a 
gulden. This proposal, as the Ehrenbuch says, went no further, owing 
to the counsels of the goddess Avarice. 

The most interesting for us, however, is the little that is known about 
Jakob Fugger's personal relation to his business. He was a financier of 
the first rank 'of high understanding.' Even to the last he was a very 
keen man of business. When his nephew, Georg Thurso, urged him to 
give up the risky Hungarian business, he rejected such timorous coun- 
sels, saying that he 'would win so long as he was able.' Yet, when the 
catastrophe came, his cautious generalship was strikingly evident. In 
spite of the distant aims and enormous extent of a business scattered 
over Europe, he suffered so little from nerves that, as he often told his 
nephews, he never had 'any hindrance to sleep, but laid from him all care 
and stress of business with his shirt.' 

We see the effect of Jakob Fugger's work if we compare the balance 
in the Fugger archives (2-1-22) for the year 1527 with the state of the 
property in 1511. 

* The best source is the MS. copy of the Chronicle of Clemens Sender in the 
Augsburg City Archives. For his buildings and charities of. Aloys Geiger, Jakob 
Fugger, p. 68. 


On the 14th February, 1511, the Fugger property in land, 

houses furniture and plate amounted to 70,884 

Of this the male line received a third in advance 23,628 

This left for the joint account of Jakob and the heirs of 

Ulrica and Georg in the business 47,256 

To this were to be added various assets (goods, book debts, 

money, or its equivalents) 213,207 

Total 245,463 

This was distributed as follows: 

Jakob Fugger 80,999 

Heirs of Ulrich 87,583 

Heirs of Georg 76,881 

Total 245,463 
Different members of the family received from this 48,672 

Total 196,791 
The remainder formed the capital with which the firm recommenced 

At" the end of 1527 the firm owned in - 

Land, houses, etc. 127,902 

Goods, book debts, etc. 1,904,750 

Total 2,032,652 
Of this a deduction was made for a charitable foundation 11,450 

Total 2,021,202 
If we deduct the capital of 1511 196,791 

we get the profit for 17 years 1,824,411 

i.e. 927 per cent., or an average of 54J per cent, for each year. 

Jakob Fugger died childless, and the Fugger business passed to the 
nephews, who had been his partners since 1510. Jakob's second will, 
executed a few weeks before his death (on the 22nd December), con- 
tained the following provisions: 'As the eldest nephew, Hieronymus, 
had not hitherto shown himself useful in the business and had not shared 
in the management, and as Jakob opined that this state would not alter, 
bis two surviving nephews, Raymund and Anton, who had helped in his 


lifetime, were, on his death, to take over the management of the busi- 
ness. As, moreover, Raymond was not strong enough to undertake 
business journeys and much other work, Anton was to be empowered to 
manage the business at his own will and pleasure as Jakob had done. 
Thus the monarchical principle in force since the death of Jakob's 
brothers was confirmed for the next generation. The family history 
turned a new leaf, inscribed Anton Fugger. 



Anton's Cautious Policy in the Early Years. When Anton took over 
the direction of the business he was thirty-two - young enough, it might 
be supposed, to wish to launch out on his own rather than to maintain 
what his uncle had won. At first, however, he showed no great enter- 
prise and was, on the whole, more intent on liquidating his present 
undertakings than in entering on new ones. This fact is the more re- 
markable in view of the extraordinary opportunities which immediately 
came his way. The financial position of the Hapsburgs was desperate. 
What this meant in politics is best illustrated by reference to two events: 
the defeat of Hungary by the Turks at Mohacs and its consequent need 
of protection by the Hapsburgs; and, secondly, the formation of the 
'Holy Alliance' of Cognac, in which Pope Clement VII forged the hatred 
and revenge of the French King and the riches of the English into a 
weapon with which to break the power of the Emperor. 

We can understand that Anton Fugger was none too ready to give 
unlimited credit to Ludwig, the Kong of Hungary, who had robbed him 
with violence a year before. Nevertheless, he helped hi in his extremity 
with 50,000 fl., which, however, proved insufficient. After the battle 
the Fugger' s agent said to the English agent, John Racket, that King 
Ludwig would not have been defeated if he had had 150,000 ducats more 
in cash. 1 The King lost his life in the battle, and in the consequent 
struggle for the Hungarian crown, Ferdinand of Austria won a victory 
over the national candidate Zapolya. This proved an expensive busi- 
ness, and there was once more danger from the Turks. The Emperor, 
moreover, asked Ms brother to raise troops for Italy, but sent no money 
to pay them as he himself was in great straits.* 

The Emperor's Italian army left unprovided laid waste Northern 
Italy. His credit in Venice and Genoa was ruined, because the Nea- 
politan Government did not pay the bills which the Emperor's com- 

* Wenzel, Lc. p. 156. Brewer, Calendar IV, No. 2485. 

* Lanz, Correspondent, I, 218, 238. Villa, Italia desde la bataOa de Pavia hanta 
deacode BOOM, pp. 110, 116, 126. Gayangos, Calendar HI, 1, 509. 


mandery bad drawn on them and because the Italians generally began 
to hate the Emperor's rule. In short, the world power policy of the 
House oi Hapsburg was once again irreconcilably at variance with the 
sorry state of its finances. 

The Fugger helped over and over again, but they demanded adequate 
security, which was not forthcoming in the summer of 1526. In August 
Ferdinand sent a trusted agent to Augsburg to raise money, which 
neither the city nor the merchants disposed to lend. The latter, not only 
the Fugger, but the Hochstetter, Paumgartner, Pimel, etc., declared 
that their money was tied up in the Tyrolese mines, that they had 
incurred severe losses in Hungary and had had their business greatly 
hampered elsewhere, and that therefore they could raise no ready 
money themselves. Attempts were made to raise loans in Strasburg, 
Ulm and the Netherlands. At length, by pledging the Crown jewels, 
Georg Frundsberg was able to raise some money and hire some mer- 
cenaries whom he marched to Italy, though there was no more money 
for their pay. The following year, 1527, the Emperor had to resort to 
the shadiest methods in order to keep his mutinous army. Ferdinand's 
situation in Hungary was no better. 1 

In Italy this chapter was closed by the sack of Rome by the Em- 
peror's troops, who paid themselves by this means. In order to ward of! 
the peril from the East, the necessary money was always raised at the 
last moment. The Fugger took a leading part in this again in 1527, and 
their claims on King Ferdinand reached a large total. 8 

The Fugger Balance Sheet in 1527. In order to get a better insight 
into the extent and nature of the Fugger business at this time, we will 
examine their balance sheet for 1527, stated in round numbers. The 
assets amounted to 3 million gulden. This was distributed as follows: 


Mines and mining shares 270,000 

Other real estate 150,000 

Goods 380,000 

Cash 50,000 

Book debts 1,650,000 

Private accounts of the partners for sums taken from 

them since 1511 430,000 

Unconcluded business 70,000 


i Villa, Lo. pp. 126, 166, 187, 190-91. Oberleitner, pp. 30, 121. Thorech, 
MatenaKen. z. einer Gesch. d. dsterr. StaatsafaMai, p. 24. 

1 Guicciardini (C. III). Ferdinand's loans with the Fugger in 1527, of. Ober- 
leitner, p. 33, 45; Thorach, p. 25-26. 


The mines were apportioned 60,000 fl. to Tyrol and 210,000 fl. to 
Hungary; the real property was 57,000 fl. plots of land in and around 
Augsburg, 70,000 fl. oi farms, 15,000 fl. for the house in Antwerp and 
its appurtenances, 6,000 fl. for the house in Borne. 
The goods consisted chiefly of copper (of which there was a store worth 
200,000 gulden in Antwerp alone), silver, tin, and a small amount of 
cloth, damask, and other textiles. 

The ready money is distributed between the chief office in Augsburg 
and fourteen factories. In the whole of Spain the Spanish agents held 
only 1,541 fl., in Augsburg 7,262 fl. (as against 10,376 fl. in Nuremberg 
and 12,844 fl. in Breslau), but this has no significance. 

Among the book debts the largest items are those in the 'Courtbook' 

the amounts he had drawn on Naples. The total was 651,000 fl. We 

note the following items: 

161,840 fl. remainder of the 415,000 fl. charged on Tyrol from the sums 

due on the Emperor's election. 
156,000 fl. bond on Naples, 7th January, 1526 = 108,662 ducats to be 

paid off before 1530. 
86,090 fl. = 60,063 ducats repayable in instalments, also transferred to 

40,000 fl. on the salt pans at Hall at interest at 8 per cent., etc. 

Xipg Ferdinand also owed 60,619 fl. over and above the 'Courtbook.' 

The Spanish book debts amounted to 507,000 fl., but these were set off 
against liabilities amounting to 337,000 fl., so that capital in Spain 
amounted only to 170,000 fl. These Spanish transactions were mostly 
connected with the lease of the Maestrazgos. 

A considerable number of doubtful claims were written off as bad 
debts, e.g.: 
206,741 fl., claim on King Ferdinand for losses for robbery of the 

Fugger business in Hungary by King Ludwig. 
113,122 fl., divers claims on Alexi Thurzo. 
20,938 fl., claim on the Pope, arising under Pope Leo, for insufficient 

security (jewels). 

The liabilities amount only to 870,000 fl., distributed as follows: 


Spain (already mentioned) 340,000 

Bills 290,000 

Hungary 54,000 

Various 186,000 



The bills ('Billbook') were numerous entries, mostly belonging to 
friends or kinsmen. They were interest-bearing deposits, which the 
Fugger took partly out of kindness, partly to increase their liquid 
capital against acceptances or bills with one name. The interest varied 
very much, large items being as little as 2-3 per cent., rising to 30 per 
cent, or more for small entries. (The latter, apparently, are instances of 

The factories and other branches besides the head office were as 

(1) Bozen: A small depot for goods. 

(2) Hall in Tyrol: Real estate, reserves of copper, silver, as well as 

26,000 fl. of outstanding debts and 3,134 fl. in cash. 

(3) Schwatz: Mine 74,000 fl. worth of ore, 45,000 fl. of outstanding 

(4) Fuggerau; Mining shares and 31,706 fl. of outstanding debts. 

(7) Smelting works : Hochkirch in Silesia. 

(8) Breslau: House and mine on the Beichenstein. 

(9) Neusohl in Hungary: Mine and houses, stock of silver. 

(10) Nuremberg: Factory with 34,000 fl. of outstanding debts. 

(11) Frankfort-on-Main: Small factory for the fairs, only some furniture 

and some unfinished business. 

(12) Cologne: Quite unimportant. 

(13) Antwerp: Large factory with house, bams, garden, stabling much 

furniture and important stocks of goods. 

(14) Amsterdam: Unimportant. 

(15) Denmark: Only business connected with forwarding Hungarian 

copper from the Baltic to Antwerp. 

(16) Venice: Chambers and magazines with much furniture and stocks 

of copper and tin. 

(17) Rome: House, some furniture, 26,000 fl. of outstanding debts. 

(18) Spain: A considerable number of factories (already described). 

Such was the state of the Fugger business after two years of Anton's 
management. It was extensive, and the number of outstanding liabili- 
ties was very large; but, on the other hand, the securities were good and 
the whole business situation was sound. The liabilities counted for very 

Cautious Policy of the lugger till 1530. Anton Fugger still did not 
allow himself to be lured away from his cautious principles. In the 
autumn of 1527, however, he undertook to get by various methods 
100,000 crowns for the Emperor from Spain to Germany, where the 


money was used to procure new troops for Italy. 1 There was, however, 
little risk involved. At the same time, the lease of the Maestrazgos was 
to be renewed, and Anton Fugger let himself be outbidden by the 
Genoese. The last named became at that time increasingly important in 
supplying the Emperor with money, and the Antwerp money market 
proved so good a source of supply that it was not necessary to apply to 
the Fugger, who had not yet begun to use the Antwerp Bourse for their 
large financial operations. A little earlier the condition of the Imperial 
troops in Italy was much what it had been before Pavia. But in the 
summer and early autumn of 1528 so much money flowed in from all 
sides that the Emperor was able to bring over the great Andrea Doria, 
whose claims Francis had left unsettled. We shall see later the details of 
this affair, where finance played the chief part. All we know of the 
Fugger at this time is the fact drawn from Dr. Christopher ScheuerPs 
letterbooks, that they had paid the half of the 90,000 ducats which the 
King of Portugal had advanced to the Emperor. The Welser had paid 
the rest. King Ferdinand, too, received from the Fugger only small 
amounts, less than from the Herwarts and Pimels. 2 

In the beginning of the year 1529 the Emperor found himself once 
again in such straits that he announced that he would not shrink from 
selling Toledo to raise money. He failed to understand why no one now 
would lend to him. In May Andrea Doria echoed the same plaint, and 
by August things were no better. There was nothing to do but to make 
peace, for King Francis was no better situated. The money question 
played an important part in the case of both parties at the Peace of 
Cambrai. Throughout this whole year there is no mention of the Fugger. 

The Hapsburgs and the Fugger in 1530. The Emperor now enjoyed a 
long period of peace with France, but this did not mean rest for him. He 
immediately betook himself to other tasks, entailing considerable ex- 
penditure. The chief motive of his leaving Spain in 1529 was to reduce 
Italy to order, that is, by the subjugation of Florence to obtain grants of 
money from the Medici Pop Clement VII. This last step was necessary 
in order to obtain the election of his brother Ferdinand as King of Home 
and to give him help against the Turks; lastly, too, the German heretics 
had to be chastised. 8 

All this meant troops and ready money; the first was forthcoming, but 
not the second. The Emperor, however, at the Peace of Cambrai had 
stipulated enormous ransoms for the French princes amounting to 
1,200,000 gold crowns. This sum, however, was not paid till 1530 and 

Brewer, Calendar IV, Nos. 3597, 3886, Papiers d'Etat du Cardinal de Oran- 
vdle, I, 347. 

'Thorach,p. 28. 

'Lanz, Correspondent, I, 360 ff. Cokccion de documented ineditos, voL XIV. 
and Heine, Briefs an Karl V. Gayangos, Cakndar, Tola, m and IV. 


1531, and the Emperor reserved the greater part of it for some undis- 
closed purpose, probably for the various eventualities entailed by his 
policy. 1 

The Cortes, at the end of 1528, had granted him extraordinary 
taxation, and we shall see later how skifully he used this to raise ready 
money in Genoa. But, as he wrote to his brother, the Spaniards de- 
tested all expenditure for Italy, and accordingly he could take very little 
money with him from Spain, and even at times could not have it sent 
after him for fear of rousing Spanish discontent. 

The Netherlands granted new 'aides,' on which the Statthalterin 
Margaretha borrowed large sums, part of which were transferred 
through the Genoese to Italy, part through the agency of the Fugger, 
Welser and Herwarts to Germany, in order to recruit new troops for 
Italy.* This money, however, did not last long. Though the Genoese 
helped once again in the summer of 1530, in October the pay of the 
troops was again 70,000 ducats in arrear, so that looting and mutiny set 
in once more. 8 

The Emperor not only kept his army together, but increased it, there- 
by furthering the Pope's dearest wish -the overthrow of Florence. 
Charles, however, always kept before the Pope the necessity of defend- 
ing Hungary against the Turks, which he considered the common duty 
of all Christendom, and so was not willing to bear the sole cost. His 
envoys also hinted at the possible chastisement of the German heretics. 
By these means it was hoped to induce the Pope to make large grants 
from his well-filled treasury. 

The Emperor before coming to Italy had obtained from Clement an 
important grant, the Cruzada. This was the name for the Crusade bulls 
which the Popes had granted in earlier times to the Kings of Castile to 
cover the cost of the war with the Moors. Under it any one could buy 
indulgences. When the struggle against the unbelievers ceased in Spain 
only the traffic in indulgences remained. The Cruzada was meanwhile 
seldom granted by the Popes. 4 

Since 1522 the Emperor had often applied first to Pope Adrian and 
then to Clement for the grant of a Cruzada General en Toda la Christiani- 
dad for a great war against the Turks. It had been granted him in 1523, 
but only for his own dominions and for one year, because the Pope was 

1 Gayangos, IV, 1, 840,' IV, 2, 83. Le Glay, Negoc. dipl. entre fa France et 
I'Autnche, precis histar. CCVH. 

1 Lille, B. 2351 (1529): 'Deniere paiez es mains de Temperem- par mandemens: 
41,000 fl. d'or aux Fockers, Velser et Herwarders.' 

* Heine, Lc. pp. 12, 24. Col. de docum. ined. XIV, 85, 92 ff. 

4 Habler, p. 113. Philippson in Sybel's Hiator. Ztscbr., voL 39, p. 281. Gaohard, 
Corresp. de Charles V et d'Adrien VI, pref. CH, CX, 2, 61, 170, 181, 190, 199, 221. 
Gayangos, in, 1. 240, 302, 325, 419, 456, 529. 


afraid of competition for the jubilee year 1525. On Adrian's death a 
ehort time after, Clement refused to grant the Bull, and, as open enmity 
then broke out between the Emperor and the Pope, there could be no 
further question of it. It is probable that the Emperor's desire for the 
Cruzada was an important motive for his making peace with the Pope, 
who on his side demanded as his price the restoration of the Medici in 
Florence. The Cruzada became once again a burning question, and in 
February, 1529, the Emperor's envoys managed to obtain the grant. 
Difficulties ensued, however, and it was still some time before the Bull 
could be published. The Emperor failed to obtain further grants till 
after Florence had fallen.* 

When Charles came back from Italy to Germany in the spring of 1530, 
for the purpose of settling its religious confusion and obtaining his 
brother's election as King of Home, he was at any rate sure of the 
Cruzada and was about to get in the French ransoms. All the same, he 
had to remain some time in Innsbrook as he had no money for continu- 
ing his journey. He had to bring himself to touch a small part of the 
French ransoms, and as he needed money at once he applied to the 
South German merchants, who gave Tn'm the help he needed. 8 

He had sent from Spain 200,000 crowns of the French ransoms and 
150,000 ducats from the subsidy previously granted him by the Cortes. 
The equivalent of these amounts was in part paid over by the Fugger 
and Welser to the Emperor himself, and in part used by them for the 
election of Ferdinand as King. The money was brought secretly to 
Fuentarabbia on the Spanish frontier and there received by an agent of 
the Fugger. The Fugger had been promised that the export of the 
money from Spain should be made as easy as possible for them; it had 
to be carried out secretly, however, because otherwise the Spaniards 
would not have let it go. 

This, however, was not all that the Fugger and Welser lent the 
Emperor. We know that together they advanced large sums on the 
Cruzada, but we know no details of the transaction. 8 We are, however, 
exactly informed as to the sums lent by the Fugger to Ferdinand for his 
election as King of Borne by a contract in the Fugger Archives, dated 
25th October, 1530, between the King on the one part and Raymund, 
Anton and Hieronymus Fugger on the other, 'on account of a sum of 

1 Gayangos,m,2,893;(III,2, 975). Bulletin de la commission ffhistoire 3, ser. 
VII,33. <7ompfe-rendtt4,Ber.XVI,p.261ff, (IV,I,117). Heine, p. 36, Gayangos, 
IV, 1, p. 146. 

1 Heine, Lc. p. 10. Gayangos, IV, 1, 478, 492, 742-43, 746 fi., 776, 783 ft., 840 
(also IV, 1, 183), IV, 2, 83. Lanz, Corresponded, I (6.-12, 1531). 

'Lucas Bern, Tagebuch, p. 75. Virck, Polit. Corresp. d. Stadt Strassburg I, 
No. 762. 


money, should Your Majesty need it, for His election as King of Rome.' 

According to this agreement, the Fugger had to pay out on Ferdi- 
nand's account 275,333 fl. 20 kr. (20,000 fl. gold to the Archbishop 
of Mainz on the spot, 32,000 fl. to him in 1531, 16,000 fl. to the Elector of 
Brandenburg, 100,000 fl. in two yearly instalments to the Count Pala- 
tine, and the remainder, 98,000 fl., direct to the King's treasurer, Pfen- 
nigmeister). The whole bore interest at 10 per cent. As, moreover, the 
Fugger 'in the present heavie courses' had had themselves to borrow 
part of the money from their friends and other merchants at extremely 
high rates of interest, while their other business had had to suffer the 
lack thereof (in return both for their great trouble and the risk that the 
Fugger had incurred by raising the money in so short a time and because 
they had had to send it to their loss by bills from the most various 
places). On all these grounds and of his special favour the King assured 
a special 'refreshment and token of honour of 40,000 fl.' Including this 
high extra charge and the interest Ferdinand's whole liability upon his 
election amounted to 356,845 fl. 37 kr. Of this amount 100,000 fl. were 
to be repaid in the Netherlands in five yearly instalments of 20,000 fl.; 
173,333 fl. 20 kr. were secured on a Neapolitan annuity of Ferdinand's, 
amounting to 160,000 ducats a year, so that this part would be paid of! 
(with 120,930 ducats) in seven or eight years' time; 73,512 fl. were to be 
repaid from the Schwatz silver. For the remaining 10,000 fl. the Fugger 
were to be allowed to take over the Mark of Burgau for the sum at 
which the Bishop of Augsburg then held it. Further, they had to pay 
an annuity of 7,000 fl. to the Archbishop of Mainz, and repay themselves 
for this from the revenues of the Joachimsthal mines and the salt pans 
at Hall. 

Perhaps, in view of these extensive repayments, the extra charge of 
40,000 fl. is not really excessive. 

A balance sheet of 1530 shows that Xing Ferdinand owed the Fugger 
not less than a million gulden, inter alia: 

112,200 still due on Charles' election as Emperor. 

249,000 fl. on the income in Naples. 

258,400 fl. old Hungarian debt. 

The hist named item, however, is perhaps the sum which had been 
written off as irrecoverable by the Fugger in 1527. They now added 
interest to the total without much hope of getting anything. It con- 
tinued to figure in later balance sheets under ' doubtful debts outstand- 
ing.' 1 In spite of these enormous loans, the Fugger made others in the 
same year. Italian affairs were now settled. The Germans had, at any 
rate, come to a provisional settlement with the Diet of Augsburg and 
the election of Ferdinand as King of Borne. 

Oberleitner, Lo. p. 45., also p. 48 ; Thorsch, p. 32. 


The retreat of Soliman from Vienna had made the Turkish danger less 
pressing for the moment. The Emperor could therefore allow himself 
leisure to settle his finances. He set up a commission to investigate the 
titles of the old claims, some dating back to his grandfather, which 
encumbered him, and he used the French ransoms, the grants from the 
Pope and other sources to pay off his debts in grand style. King Ferdi- 
nand made an attempt at any rate to consolidate his burden of debt. 1 

On 14th November, 1530, the Emperor ennobled Raymund, Anton 
and Hieronymus Fugger, gave them great immunities, and allowed them 
to choose whether and when they wished to take the title of Count or 
Freiherr. They did not, however, do so at this time. 2 

The Balance Sheets of the Fugger in 1533 and 1536. At this period the 
business capital of the Fugger did not increase so rapidly as under 
Jakob. In 1527 it had amounted to 2 million gulden, of which, however, 
400,000 fl. had been taken out by the partners, so that only 1,600,000 fl. 
remained. New balance sheets were drawn up in 1533 and 1536, and the 
latter shows 1,800,000 fl. as business capital. We can state the profit 
only for the period 1534-6. It amounted to 120,000 fl. - i.e. only 2* per 
cent, per annum. 

The assets in 1536 amount to 3,811,000 gulden. The liabilities had 
nearly doubled between 1527 and 1536. They now amounted to 
1 ,770,000 gulden. In other words, the increase of the business since 1527 
had only been made possible by outside capital. The bill engagements 
had risen from 290,000 fl. to 703,000 fl. The 'Billbook' now contains a 
large number of large and small entries, interest-bearing deposits 
mostly in the names of friends and kinsmen, though other names occur, 
showing that these were in part real loans. Most items are under 
10,000 fl., the largest single item being 34,000 fl.; the average rate of 
interest is 4-5 per cent. 

In Spain, too, the Fugger owed large sums, which appear to have been 
closely connected with the outstanding debts due to them. 

We may mention: 


New lease of the Maestrazgos 25 

Sebastian Neidhart 12& 

Christopher Herwart 3| 

Jakob Welser & Sons, Nuremberg 8J 

In Antwerp we may note as large creditors Lazarus Tucher with 

*I*Dz,Co r re3 1 xmdenzI, 421. Thorsch, p. 30. Brussels Archives (Papier* d'Etat 
et de I' 'Audience No. 873). 
Gei ge r,p.23. 


21,000 fl. (against which are to set off 4,700 fl. owed by him) and 
Erasmus Schetz with 5,000 fl. 

Taking it all in all, while the state of the business was not so sound 
as nine years before, there was yet no cause for anxiety. 

Subsequent Period till, 1546. We have little information as to the 
Fugger's financial dealings in the following decade. 

In 1536, when the Emperor again entered on war with Prance, 
the Fugger instantly took a leading part in raising the necessary 
money. On the 14th April they granted the Emperor a loan of 
100,000 ducats, payable in two instalments in May and June, to be 
repaid at the end of the year with 14 per cent, interest from the first 
gold or silver from India. For still greater security they were granted 
a privilege, whereby they received an annuity of 26,526 ducats from 
the revenues of the crown of Castile with the right to sell it, if the 
debt had not been repaid before January, 1537. 1 

The supply of gold and silver 'from India' was this year so plentiful 
that the mints did not know how to deal with it. Nevertheless, the 
Emperor's war-chest suffered from permanent emptiness, so that after 
the unsuccessful expedition to the South of France, the Emperor's 
counsellors recommended him to cease hostilities for want of money. 2 

On 26th February, 1537, the Fugger again lent the Emperor 100,000 
ducats, payable in two instalments in May and June, to be repaid 
from the first Spanish revenues of the year 1538. For greater security 
the Fugger were allowed to hold back the rent of the Maestrazgos. 

The loan was to begin to bear interest at 14 per cent, two months 
before the payment of the instalments, an increase of the interest 
which was fairly usual. The reason adduced was the difficulty of rais- 
ing money, which forced the lender to make arrangements some time 
before paying over the loan, so that large sums were lying at home 
without interest, or bearing no interest while on their way from other 

Moreover, in 1537 the Turkish danger made new armaments neces- 
sary and King Ferdinand had to borrow 83,000 florins from the 

i the years 1538 and 1539 the Emperor continued to have large 
amounts of money brought from Spain and the Netherlands to Ger- 
many and Italy, though the war with France had long been over. 
People puzzled over what this money was meant for. Was it for a 
new expedition against the Barbary pirates, against the Turks, or 
against the German Protestants? The kst named began to regard the 

1 Fugger- Archiv. 44, 1. 

Lanz, Carresp. H, 265, 656 ff. Schenerl's MS. letterbooks, June, 1534. 



Fugger, who were once again largely interested in these affairs, with 
special distrust. 1 

We have again a Fugger balance sheet for the year 1539, though 
only a rough profit and loss account. Once again the extensions of the 
Spanish business is noteworthy. 

The book debts now amount to 1J millions, against which the lia- 
bilities are 542,000 fl. 

Among the debts due we note: 

His Imperial Majesty 


Bill of 30,000 ducats 10-8 

50,000 6-7 

70,000 32-2 

65,000 17-2 

150,000 46-6 

476,000 105-0 

Maestrazgos % 75-2 

This is more than 780,000 ducats. 

Among the Spanish liabilities may be instanced: 

Alonso de Santa Gadea 11 

Hans Welser and Brothers 29 
Sebastian Neidhart 8-2 

% of 476,000 ducats 21-5 
various % 9 

These 79 million maravedis of over 200,000 ducats are apparently 
shares in the Fugger's large transactions with the Emperor. 

At Antwerp, also, the book debts had grown, and now amount to 
202,000 fl. The King of Portugal owes 22,100 fl., the Statthalterin 
Maria 7,000 fl. 

The 'Courtbook' is considerably reduced and only amounts to 
417,000 fl. This reduction is to some extent only apparent, as the Nea- 
politan engagements are kept in a separate account, amounting to 

i Scheuerl's letterbook, Match, 1538. Letter of Anton Welser in Auj, . 
LienhardTucher in Nurnberg. 7 April, 1539 (Tncher-Arohiv). State papers, 
Henry Vm, voL I, 608, 16 April, 1539. Lanz, Carres?. H, 307. 


S62.000 fl. There is nevertheless a slight fall in the outstanding claims, 
inconsiderable, however, in comparison with the increase of the Spanish 

The bill liabilities have increased still further to 804,000 florins. 
For the years 1540 and 1541 we know only of two rather unimportant 
loans granted to King Ferdinand by the Fugger; these were followed 
at the beginning of 1542 by business on a larger scale. 1 A new period 
of large financial operations began, but unfortunately our information 
is very imperfect. 

The progress of the Turks in alliance with France forced the Haps- 
burg brothers to war on two fronts and to extraordinary financial 
efforts. With the help of the international money-market of Antwerp, 
they raised loans on a larger scale than ever before. In this the 
Fugger played the leading part. We shall see later how these loans 
were raised in Antwerp. Unhappily the Netherlands finance accounts, 
in other respects very instructive, do not give the names of the in- 
dividual lenders, but only those of the financiers who acted as agents 
for the court of Brussels. 

Accordingly the Fugger's exact share is not clear. From another 
source we learn only that the Queen Statthalterin Maria in 1542 
borrowed from the Fugger and Welser 250,000 crowns within six weeks 
for the Emperor, while he himself borrowed 600,000 crowns in Spam, 
and that he raised a loan from the Fugger for Italy amounting to 
100,000 ducats. In 1544 King Ferdinand received 109,105 ducats and 
108,645 fl. from Queen Maria. We do not know who lent her the 
money. 2 

Period of the War of SdimalkaUen. The period we now enter is 
fateful for the Fugger. At this time their business reached its highest 
point, but the seed of corruption was now sown and was shortly after 
to show itself. 

The firm had already undergone an important change. Kaymund 
Fugger had died in 1535, and Hieronymus in 1538. In this year Anton 
had taken his nephews, Hans, Jakob, George, Christopher and Eay- 
mund, into the business which henceforth bore the name of 'Anton 
Fugger and Nephews.' Anton retained complete control of the concern. 
He had to give no account of profits and losses to his nephews, and they 
on their side had to render unquestioning obedience to him. 8 It is 
doubtful whether he used this absolute power invariably for the good 
of the family. The business, however, which proved the most unlucky 

Thorsoh, p. 34. Gairdner, Gal XVIII, No. 292. 

1 Lanz, Correspondent, January, 1542. Thorsoh, p. 39. 

Cf. the GesellBchafts-Vertrag of 1538 in the Fogger-Archives, 2, 1, 14, fol. 


was not undertaken till the last years of Anton's life when his hold 

on the reins was somewhat loosened. 

The force of money in determining the coarse of the world's his- 
tory meets us at every turn at this period. Up to 1546 we have been 
able to trace it very imperfectly from lack of detailed information, 
but from the outbreak of the war of Schmalkalden we can follow more 
closely again. 

In April, 1546, when the Emperor's decision to make war on the 
Protestants was not yet known, he sent orders to his son Philip in 
Spain to raise the money for the war. 1 

The first step was to be the raising of a loan of 150,000 to 200,000 
ducats at the lowest possible interest from the Fugger or the Welser 
on the pretext that it was for the maintenance of the Imperial Court. 
Next, a message was to be sent to Genoa to the Imperial envoy 
Figueroa ordering him to raise as best he could a further 150,000 
ducats by means of a charge in the Papal grants and on the rent of 
the Maestrazgos. Finally, 200,000 ducats were to be raised in Antwerp, 
if possible on 'finance,' i.e. by short-term borrowing on the bourse, 
which the Emperor thought more advantageous and easier than bill 
transactions. This was perfectly true, for we know from other sources 
that in Antwerp bills on South Germany were only taken with difficulty, 
the uncertainty of the political situation having made the merchants 
nervous. The attempts to raise money must be distributed in this way, 
the Emperor said, because it would be impossible to raise so large a 
sum in any one place, and because by so doing it was easier to conceal 
the aim of the operation. The letter gives further instructions for the 
execution of the different financial undertakings and emphasizes the 
necessity of having all the money ready for use in Germany at the 
beginning of June. 

These arrangements, however, proved in part impossible to carry 
out, first because of the difficulty of getting the money so quickly 
from Spain, then because the Pope left the Emperor in the lurch. He 
withdrew the grants he had originally promised and in the end took 
sides against Charles,* who accordingly could get no money in Italy. 
He was therefore thrown upon the Catholic business houses of South 
Germany, and on the Antwerp Bourse. At first, however, these par- 
tially failed him, so that his state was for some time critical, and it 
was only in July that he could raise sufficient troops. His opponents, 
the Protestant princes, fared scarcely better. 

'This important document is published in v. DoIIinger, Dokum. 2. Qeachichle 
tfarfa 7, p. 44ff. 

' Lanz, Correspond* Karls V, vol. n, 490. Maurenbrecher, Karl V und die 
deutechm Protestanten, p. 120 ff., 128, and Appendix, p. 76. 


party, under the Burgomaster Jakob Herbrot, who kept the city on 
the side of the Schmalkaldian League. A middle party under another 
Protestant Burgomaster, Hans Welser of the Nuremberg Welser, 
strove in vain for neutrality, while the great Catholic patricians 
mostly left the city because they were discontented with the present 
rule and did not wish to be involved in the confusion. We shall see 
later how some of these kept a wavering attitude between the parties. 
The Fugger, however, once again proved faithful to the House of 
Austria. 1 

The support which the Emperor received from his great Catholic 
merchants roused the greatest bitterness among the Schmalkaldians. 
They, too, were ceaselessly embarrassed for money. Though the King 
of France advanced 100,000 crowns and the cities belonging to the 
League contributed, the Elector of Saxony, Johann, had still, after the 
outbreak of the war, to try to raise money in small sums, 1,000 to 
6,000 florins at a time, in order to pay his troops. The League in July 
demanded accordingly that the Augsburg merchants, who had raised a 
large sum to help the Emperor in this ruinous purpose, and had en- 
couraged and even incited him to it, should now do the same for the 
opposite party and cease to lend to the Emperor. They even demanded 
that the Augsburg Council should force, its burghers to lend all their 
ready money, jewels, and silver plate, for the League. When, in August 
and Spetember, there was talk of new dealings of the Fugger with the 
Emperor, the letters of the Catholic business houses, the Fugger, 
Faumgartner, Neidhart, Herwart, Meuting, and of the companies of 
Bartholomew Welser and Hans Herwart, were seized and opened. 
The Fugger had promised the Augsburg Council to deliver the 
wheat harvested on their lands at Augsburg. They were, however, 
forced by the Schmalkaldians to send it to their head-quarters at 

The Augsburg Council held it their duty to protect the interests of 
their citizens against such demands. This they successfully did, and 
Anton Fugger showed his gratitude later by interceding for his 
native city with the Emperor. In September the bitterness of the 
Schmalkaldians against the Fugger reached its climax. They told the 
Augsburg envoy, Matthew Langemantel, that they knew that the 
King of England was just about to repay 60,000 fl. to the Fugger and 
Welser, who must lend this money to the League. Should they decline, 

1 Cf . Hooker in d. Ztschr. d. histor. Vereina /. Schwaben, 1 , 34 ff. Also Litteralien 
in the Augsburg Archives, and the correspondence of Sebastian Neidhart, Hieron. 
Seller and Anton Fugger. For the finances of the League of Schmalkalden, cf. 
Kins, Das Fincmzwesen ErnesKn. Htaues Sachsen im. 16 Jahrh, p. 75 ff. 


in spite of having lent the Emperor another 200,000 fl., they must be 
treated as open enemies, 'as those who by their loans and bills had 
furthered the Emperor in this war, which else he had been unable to 
bring to pass.' The Landgrave of Hesse threatened to destroy the 
Fuggers' farmhouses. When the Augsburg Council informed Anton 
Fugger, who was in Schwatz, offering him to take care of his interests, 
he replied that he had no money which he could lend the Schmal- 
kaldians and that he had to use the money repaid him by the King 
of England (which was much less than had been alleged) for the pay- 
ment of his debts and the maintenance of his family. He thanked the 
Council for their offer and promised again to deserve it. Accordingly 
the Council now decided to take definitely the side of its burghers 
against the Protestant princes, and showed its solidarity by regretting 
that it must bear the displeasure of the princes in common with 

This did not fail to happen. The Elector of Saxony said, 'How 
comes it that the men of Augsburg wish to bite the nut with the 
Fugger, when before they kept Baymund Fugger in prison, merely for 
offending against a poor man?' 

It appears that in the end the democratic party were able to obtain 
forced loans from the Catholic merchants, but we are ignorant of the 
details. In any case, the Schmalkaldians' complaints as to their financial 
difficulties never ceased, while the Emperor now had plenty of money. 
He accordingly played a waiting game, while the League tried to force 
him to a battle. The invasion of Duke Maurice of Saxony into the 
domain of the Elector forced the Elector Johann Friedrich to separate 
himself from the League, and so the Emperor, at the end of 1546, 
became master of South Germany. 

The South German Protestants now had to entreat the Emperor for 
mercy and buy it with enormous contributions. Anton Fugger under- 
took to act as mediator for his native city with the Emperor, who had 
then pitched his head-quarters at Ulm. By the gift of a golden drinking- 
vessel valued at 3,000 kronen, Anton Fugger gained the favour of the 
Duke of Alba, who helped in his turn to get a reduction of the Augs- 
burg contribution. 1 In the whole negotiation, Anton Fugger appears 
as the sole intermediary and as a great man who often had to deal 
severely with the Augsburg Council, when they tried to cheat over 

The Welser, who at the same time also had a representative in the 
Imperial camp (we shall see later what forced them to this), had to 
be content with hard treatment, because their behaviour at the begin- 
ning of the war had been very uncertain. Anton Fugger was held up 
1 Ztschr. d. histor. Feretne /. Schwaben, I, 57, 294. 


before them as a model. He, on his part, was not at all edified by the 
violence and low cunning which were manifest both in the Emperor's 
policy and in the conduct of these finances, as is shown by many 
passages in his letters. He decided very unwillingly to help again with 
ready money, which was needed for the upkeep of the army and 
the coming campaign in Saxony, for the forced contributions were 
not paid immediately. On the 27th January he lent the Emperor 
122,477 fl. and on the 15th February a further 20,000 ducats. On 
the 26th February, however, the Welser's representative, Christopher 
Peutinger, reported to Augsburg that 'the Fugger were tired of 
Imperial loans; they had already let themselves in so deep that 
they had to wait a long time before they could get their money 

In further surmising that they would have to come in again, he 
was right. On 15th May, when Charles had conquered the Elector of 
Saxony, he concluded negotiations with the Fugger for a loan of 
60,000 fl. in the camp at Wittenberg. Anton Fugger, meanwhile, had 
betaken himself from Ulm back to Schwatz, where he spent the greater 
part of the year in low spirits and poor health. 

We learn from his letters and his will that the Fugger had had serious 
thoughts of giving up their business. Had they done so, it would have 
been fortunate for them. 

Wish of the Fugger to give up their Business - Its state in 1546. In 
his will, dated the 22nd March, 1550, and also in the last codicil of 
1560 which deals with the business, Anton Fugger says that he had 
hoped that his nephews would follow in his footsteps and those of their 
forbears and become merchants, but that he had seen that none of 
them were disposed so to do. He had accordingly agreed with them to 
bring the business 'to an end and retire.' This decision must have been 
made in the year 1547 or the beginning of the next year, for the 
general balance sheet drawn up for its execution was closed at the end 
of the year 1546, and the first great distribution undertaken under this 
was made on 31st July, 1548. We must next consider the balance 
sheet for 31st December, 1546. It is perhaps the most important which 
has remained for us. 1 


The landed estate valued at 729,331 

The other assets, after deducting liabilities 4,382,552 

Total 5,111,883 

1 In the Fugger-Archives, 2, 1, 22a, there are several copies of the balance 
sheet of 1546. The differences are explained by the different methods of cal- 



The capital in 1539 had been 2,197,740 

The amount made in the seven years was therefore an 

annual average of 19 per cent. 2,914,143 

This profit was not, however, distributed in full. The money 

used in improvements on the knded property was 

written off at 210,443 

The male line received on the remaining value of the landed 

estate preferential payment of $ 169,346 

Anton Fugger received for his management $ of the final 

profit also as a preferential payment 
Finally the receipts from certain old outstanding debts were 

distributed separately 133,288 

Total amount deducted 822,704 
So that only 2,091,439 fl. was actually distributed. 

It may be stated here parenthetically that the total, after allowing 
for these deductions, was held as follows: 


Anton Fugger, founder of the Fugger-Babenhausen branch 2,436,790 
Raymund Fugger's heirs 1,526,251 

Jakob and Hieronymus Fugger's heirs 758,202 

Further, we must consider an 'Audit of the General Balance Sheet 
of 1546,' which was meant to show the profit and loss of the different 
branches of the business. According to this the gross profit for the 
period 1539-46 was: 


Spanish business 1,515,565 

Hungarian business 1,258,744 

Neapolitan revenue 259,378 

Silver trade 144,914 

The expenses were: In Augsburg, 81,193 fl.; in Spain, 54,050; in 
Antwerp, 37,717; in Hungary, 85,350, and the interest paid on this, 
as shown in the Bill-book, as 208,641 fl. 

This statement shows the importance of the Spanish and Hungarian 
business for the whole situation of the firm. If we deduct the expen- 
diture from the gross profit, these two branches show a net profit of 
2,634,000 fl., i.e. nearly 90 per cent, of the total profit. 

The assets in round figures are as follows: 



Landed property and mines 800,000 

Stock-in-trade 1,250,000 

Heady money 250,000 

Book debts 3,900,000 

Private accounts of the partners 400,000 

Various 500,000 

Total 7.100,000 

Among the landed property Babenhausen, valued at 156,000 fl., is the 
largest; Weissenhorn, with Maverstetten and Buch, are down for 
61,000 fl. Eirchberg, 59,000 fl.; Biberbach, 44,000 fl.; Donauworth, 
56,000 fl.; the Augsburg property, 63,000 fl.; and there are various 
others. Copper and fustian are the only considerable stock. The stock 
of fustian was valued at 125,000 fl., and more than a million gulden's 
worth of copper, half of which was in Antwerp. 

ment as to the Spanish debtors is far from clear. It is specially striking 
that the two largest claims against the Emperor (447,429 ducats lease 
of the latest revenues of the Maestrazgos and 219,159 fl. for bonds 
(libranzas) on the Maestrazgos which the Fugger had paid) are not 
included in the sum total of the Spanish debts. These, nevertheless, 
amount to two million in round numbers, nearly all claims against 
the Emperor. 1 

The next large item among the book debts are the Antwerp debtors. 
Among these we note: 


The city of Antwerp note 21,746 

Caspar Ducci for (Flemish) bonds of the Eeceivers General 44,517 
King of England 83,900 

Queen Maria Statthalterin of the Netherlands 30,739 

The King of Portugal 6,252 

These large items amounted to 187,000 Flemish, or 790,000 fl., 
the total of the Spanish and Antwerp outstanding claims amounted to 
2| million as compared with 1J million in the year 1539. 

The 'Courtbook' which contains King Ferdinand's debt is closed 
at 443,108 fl., only 26,000 fl. more than in the year 1539. The old 
Neapolitan entries have disappeared. Ferdinand, however, had shortly 
before sold to the Fugger a perpetual annuity of 11,000 ducats yearly 

'Rymer, Feeder*, Ed. v. 1704r-27,XV, 101. (Fugger-Arohiv. 2, 1, 22a, Avigs- 
burger Stadtarohiv (Litteralien) and Acts of the Privy Council, I, 488 ft.) 


on his revenues from Calabria in return for a cash payment of 110,000 
ducats. The Fugger drew this rent direct from the.collectors in twenty- 
eight cities and estates. This business is entered in the books at 
150,000 fl. 

The liabilities amount to 2 million gulden, not specially much if we 
consider how the earning assets had grown. The Spanish creditors in 
fact are less than in 1539, 342,407 ducats or 490,000 fl. (as against 
542,000 fl. in 1539). Of this sum 200,000 is only a book entry on the 
Emperor's side, so that the actual liabilities of the Spanish business 
are only 290,000 fl., shares in the Consortium held by the Nuremberg 
Welser and some others. The Fugger's bill liabilities, too, have fallen 
since 1539, they amount now to 694,000 fl. The Antwerp business, 
on the other hand, is indebted to the extent of 110,234 Flemish, or 
about 460,000 fl. in thirty-five different entries, mostly to other South 
German houses. In order to carry on their large Antwerp business, and 
to get money relatively cheap, the Fugger had begun to borrow on 
the Antwerp Bourse from quarter to quarter, or for two quarters, of 
the kind euphemistically called 'Deposits.' For these they paid 1|-2J 
per cent, per quarter, 4f-5 per cent, per half-year, about 9 per cent, 
a year, while they on their side made about 12-13 per cent, on their 
money in Antwerp, 

The 'Fugger bills' became at this time an article of current trade, 
an innovation which was only to show its dangerous consequences 
at a later time. At first the Fugger bonds were considered as safe as 

The balance sheet of 1546 shows the following new factories: Krem- 
nitz in Hungary, Teschen, Cracow, Danzig, Erfurt, London, and 
Florence, mostly small branches for the dispatch and sale of copper 
and fustian. The financial situation of the firm, as shown by this 
balance sheet of 1546, must still be regarded as sound in spite of the 
large increase of investments in Antwerp and Spain. In view of the 
ever increasing difficulty of getting money from Spain these last con- 
stituted a grave risk. 

The firm of 'Anton Fugger and Nephews' held at this time a business 
capital of about 5 million gulden, the largest it had ever held, and 
certainly the largest ever held till then by one firm. 

On the 31st July, 1548, as we have seen, a considerable part of the 
business capital was distributed to the partners. It was hoped to share 
out the rest before the end of the year 1550, and so the Fugger business 
would have been brought to an end. But, as Anton Fugger says in his 
will, 'On account of long wars, matters have gone right heavily, so 
that not only were we unable to bring our own business to an end 
and collect the monies owing to us, but we have been constrained, in 


order to serve the Emperor and the King, to make fresh loans, our- 
selves borrowing money and getting into debt.' 

New Business -Seeds of Decay. During all the ensuing period, the 
last years of Anton Fugger, it is quite clear that an effort was made to 
liquidate the existing undertakings and begin no new ones. The fact 
that new business was forced on him he seems at first to have taken 
hard. As soon, however, as he started on the inclined plane, he seems 
to have lacked energy to apply the brake with force. His Antwerp 
agent, Matthew Oertel, was chiefly responsible for the gigantic increase 
of the new financial undertakings. Anton Fugger himself, however, 
cannot be exonerated for this and its evil consequences. Like his 
Uncle Jakob, he seems not to have been free from the wish 'to "make" 
money as long as he might.' This wish, fully justified in 1525, would 
only have been justifiable a quarter of a century later had Anton 
Fugger had a successor of his own pattern. The Fugger might then have 
remained the first financiers of Europe. As it was, the third generation 
lacked the business genius of the first and second, and had not only 
to yield up the first place to the Genoese, but to see their credit, once 
so unimpeachable, severely shaken. 

The Fugger in the years when they were liquidating their affairs 
undertook large new business which was not forced on them. This is 
plain from the history of their relations with the English Crown, of 
which we saw the beginning in the years 1545 and 1546. In 1547 the 
Fugger were still owed on this amount 83,900 Flemish, 639,000 L. 
on the money lent and 20,000 L. for copper. The first of the sums was 
paid back, the second still further deferred. 1 

In September, 1549, William Damsell, the financial agent of the Eng- 
lish Crown in Antwerp, had tried for months in vain to raise a loan in 
Antwerp, and the Fugger finally agreed to advance for a year 54,000 L. 
= 328,800 Car. fl. At the end of the year the loan was prolonged at 
12 per cent., and though a payment of 127,000 Caroms gulden was 
made in February, 1551, the Fugger had had to make several other 
large loans in this time. 

In the beginning of the year 1552 Thomas Gresham, the new financial 
agent of the English Crown, went to Antwerp to borrow money to pay 
the Fugger. Their claims amounted to 123,047 L., of which 77,577 L. 
was paid off in two instalments (63,577 L. and 14,000 L.) The rest, 
45,470 L., was then prolonged, but appears to have been paid back 
shortly afterwards, as the Fugger balance sheet for 1553 shows no claim 
on the English Crown. They needed all their money for the Emperor. 
In November and December, 1553, Christopher Dawntsey, a new 
English agent, repeatedly approached the Fugger's Antwerp agent for a 
1 Acts of the Privy CounoU, II, 80, 159. 


loan, which was refused on the ground that the Fugger had already lent 
all they had to lend to the Emperor. 1 Their relations, however, with 
the English Crown were not yet at an end. On 1st August, 1548, the 
Fugger lent the Emperor 150,000 ducats in return for a charge on the 
Neapolitan revenues, at 12 per cent, interest. We hear of no further 
loans till 1551. This is connected with the increasing difficulty with 
which they collected their outstanding debts. The three loans granted 
at Ulm and Wittenberg during the war of Schmalkalden were still in 
arrears in 1551. On the occasion of the grant of a new loan, apparently 
they were formed into a consolidated debt, which, inclusive of interest 
at 12 per cent., up to the end of February, 1552, amounted to 273,161 
ducats. This was secured partly on Antwerp and partly on Spain. 

In April, 1551, the Emperor at Augsburg demanded fresh loans from 
the South German merchants. Probably for the sake of collecting their 
old claims the better, the Fugger and the Welser agreed. They ad- 
vanced no ready money, however, but issued bonds which were dis- 
counted by Wolff Haller von Hallerstein in Antwerp at 11 per cent. 
The Fugger's share amounted to 100,000 Caroms gulden or 70,000 fl. 

In October, 1551, the Emperor again borrowed in Augsburg 76,000 
ducats at 12 per cent, in return for a charge on the gold and silver 
expected from 'India.' The firm of Anton Fugger and Nephews was 
interested in this to the extent of 33,000 ducats, and Anton Fugger 
on his own account with 20,000 ducats. The large undertakings which 
Anton Fugger repeatedly undertook for his private interest prove 
clearly that the passion for money-making was not yet dead in him. 
But at the moment we have now reached, it was not very great, if 
we may judge from the comparatively small sums which he contributed 
to the loans. Towards the end of the year 1551, when the Emperor 
again needed money to pay his army before Magdeburg, the Augsburg 
merchants declined to grant him any more loans, and it was only with 
the greatest difficulty that he extracted 25,000 thalers from the city 
of Nuremberg.* 

Charles V and Anton Fugger in 1552. We have now reached the 
important turning-point in the reign of Charles V, and we meet once 
again a striking instance of the power of the Fugger's money. It is the 
last time that they had the Emperor's fate in their hands. Both the 

1 The English sources are not to be trnsted as to figures. Cf. Turnbull, Calendar 
of State Papers, foreign series, Edward VI, No. 193, 198-99, 207; Queen Mary, 
No. 69, 104. Acts of the Privy Council, m, 26, 33, 219, 605, IV, 27, 29, 40, 99. 
Nares, Memoirs of BurgMey, p. 405 (caution). Butgou, Life and Times of Sir 
Thomas Gresham, I, 80 et seq. 

'Manunle der Heron Eltern in the Kreis Archive in Nuremburg, 1551, 
Wednesday after Christmas. 


beginning and the end of his reign leave the mark of their name. Next 
to the election of Charles as Emperor the negotiations of Anton Fugger 
with Charles in the sad days of Villaoh are the clearest proof of the 
close ties of common interest which bound the Fugger to the Baps- 
burgs. 1 

In January, 1552, the Elector Maurice of Saxony had bought the 
financial help of the French King by ha-nding over Metz, Toul, and 
Verdun. In February he came out openly against the Emperor. 
Charles was in Innsbruck without money and troops, and his first 
attempts to raise money were fruitless. The merchants knew only too 
well, as Charles himself stated in his letters, that the Emperor could 
no longer give them security or safe revenues. Perhaps they feared 
'those who have weapons in their hands,' or were affecting to do so, 
as the Emperor suspected. 

'It seems,' he says, 'as if the merchants were agreed together to 
serve me no longer. I find neither in Augsburg nor elsewhere any 
man who will lend to me, howsoever large a profit be offered to him.' 
Such was the result of this violent financial policy of the time of the 
war of Schmalkalden. 

Nevertheless in March Queen Maria of the Netherlands succeeded 
in getting from the Fugger's Antwerp agent a small amount of money. 
But there was not much to be had in the Netherlands either. During 
the early part of the year the Emperor was unable to oppose MB 
enemies, who were actually masters of Germany, and his letters show 
that his helplessness was entirely due to lack of money. 

For a considerable time he had been negotiating with Anton Fugger 
for a large loan and had even had it promised to him- The financier 
delayed the fulfilment of his promise, alleging that the warlike disturb- 
ances in South Germany, the failure of the Frankfort Easter Fair, and 
the prevailing tightness of money, made it impossible for him to raise 
the necessary large sum himself. In vain the Emperor urged that 'in 
haste lies the use of this affair.' At the end of March Anton Fugger was 
bidden by an autograph letter from the Emperor to come to Innsbruck 
in all haste. 'This is what I now most greatly desire,' Charles wrote. 

Anton Fugger in reply to this urgent appeal did not delay in setting 
out. The negotiations in Innsbruck as to financial help on a large 
scale were feverishly carried on between the Emperor's secretary 
Erasso and Anton Fugger; but this time also they proved very difficult. 
The small forces which the Emperor had already recruited, having 
received no pay, were threatening to disband. The garrisons of the 

1 Here, besides the Fugger Archives, I have only used Lanz, Correspondent 
Kark V, voL IH, pp. 100 ssq. 


fortresses which prevented the Elector Maurice from destroying the 
Emperor altogether were insufficient in numbers and badly provisioned. 
Accordingly Maurice reduced Emberg on the 19th May; and the Em- 
peror and his Court, including Anton Fugger, had to flee in haste to 
Villach. On the 23rd May, the Elector invested Innsbruck. Charles 
tried in vain to play off the former Elector Johann Friedrich against 
Maurice. Money was lacking for this as well as for munitions. Attempts 
were made to raise money in Augsburg, Ulm, Nuremberg, Strasburg, 
and even in Venice, but the South German merchants and their 
Venetian agents were on the side of the Emperor's enemies. Anton 
Fugger was the last hope of the Emperor, now old, ill, and hard pressed. 
It is not too much to say that Anton Fugger saved him, for without 
money and troops he would have had to agree to all the conditions 
proposed by the German princes in the negotiations which opened at 
Passau on 26th May. Charles expressly declared that he was raising 
the money in all haste in order to negotiate with more authority at 
Passau and in order to destroy the impression that he was powerless. 
There is a striking and sudden change of tone in June when his arrange- 
ments with Anton Fugger were concluded. He now took his time 
examining the conditions of the intermediaries, and Maurice did not 
get nearly all that he aimed at. 1 

Anton Fugger lent the Emperor the enormous sum of 400,000 ducats. 
Of this sum 100,000 ducats were to be paid over in Germany to the 
Queen of Bohemia (60,000), the Cardinal of Trent, etc., and 50,000 
ducats in Venice. The Emperor kept at his own disposition the remain- 
ing 250,000 ducats. He owed the Genoese about this amount, and had 
originally intended to pay it by drafts from Spain. He himself, how- 
ever, was now in need of money, and Anton Fugger was to try to 
induce the Genoese to extend the period of the loan for one or two 
years longer, and if necessary himself to act as guarantor. 

In telling his eldest nephew, Hans Jakob, of this contract, Anton 
Fugger added that it was to be hoped that the business with the 
Genoese would come to nothing. Never yet had a business been con- 
cluded with so little hope of profit. The nephews were to consider 
whether they would agree that it should be for the firm. Their agree- 
ment was necessary because it had been settled to break up the firm. 
In fact the nephews did not come in, so Anton Fugger took over the 
business on his own account. 

The Fugger's guarantee did not, however, prove to be necessary for 
the Genoese. Meanwhile the Emperor was in need of money north of 
the Alps in order to ward off an invasion by the King of France. He 
was therefore easily able to use the 250,000 ducats which had not yet 

* I*nz, Lo. HI, 237 <wd v. Dofflnger, Dokumente z, Qewhkhte Kark V, p. 20, 


come into his disposition. The Queen-Regent of the Netherlands made 
an agreement on the 8th August with Matthew Oertel, the Fugger's 
agent in Antwerp, that the 250,000 ducats should be paid over then. 
This payment, which constituted a remarkable achievement for that 
time, was carried out on the 10th November. A short time before 
unusually large cargoes of silver had arrived from America in Antwerp 
and Genoa, and the Fuggers had also managed to extract a considerable 
sum from Spain. Generally speaking, they remained determined to 
liquidate their business, and were not at all displeased that at this 
juncture the Genoese helped the Emperor with still larger advances. 
The loan of Villach nevertheless constituted a large increase of their 
investments and especially of the unpopular Spanish investments, for 
the repayment was to take place exclusively in Spain. This, however, 
was a source of extra profit, which was welcome in view of the very 
moderate interest (12 per cent.), but it considerably increased the 
difficulties of liquidation. 

Anton Fugg&r and the Antwerp Bourse. The Emperor's war with 
France, which needed financing on a scale hitherto unknown, threw 
all the Fugger's good resolutions about retirement to the winds. From 
the year 1553 we hear again of several large dealings with the Emperor. 
Matthew Oertel lent the Court at Brussels sums of 195,000 and 18,000 
ducats, and these, together with the Villach loan, were secured in 
Spain, so that the Spanish revenues were mortgaged up to 1557. In 
April, moreover, Anton Fugger bought for 300,000 Carolus gulden a 
10 per cent, annuity on the revenues of Brabant and Flanders. In the 
same year their further engagements are mentioned - one of 85,000 
ducats, one of 164,926 Rh. fl. and one of 173 million Maravedis -all of 
which seem to have been concluded in the Netherlands. Anton Fugger 
repeatedly complained in his letters to Matthew Oertel that 'no Reso- 
lution as to our debts will come from the Court. Verily in these heavy 
times they have much else to do, but it is yet hazardous and these 
affairs are tedious.' Anton Fugger had already had to borrow in Augs- 
burg and Nuremberg in order to fulfil these large new engagements. 
Towards the end of the year, when one of these payments matured, he 
gave orders that it was to be prolonged even at 10 per cent., 'for if 
I lay the money on finance (short term loans) it bears 12 per cent.' 

In those times this was a dangerous principle. It shows Anton's 
continual zeal for money-making that in this year 1553 he bought 
from Duke Cosimo of Florence, for 100,000 ducats, an annual sum of 
10,000 ducats from the Duke's Neapolitan revenues. The negotiations 
were carried on between the Fugger's Venetian agent and a ducal 
official according to the instructions of Anton Fugger. He seems to 
have been unwilling, but to have been tempted by the large profit, 


which overcame his dislike of the Neapolitan connection and his mis- 
trust of his correspondent. He seems to have feared, not without 
reason, that he was going to be cheated; and we get the impression 
that the Venetian agent, who was himself interested in the affair, 
promoted it on his own account and that Anton Fugger let himself be 
over-persuaded. From the last months of 1553 and the beginning of the 
next year letters of Anton Fugger to Matthew Oertel have been pre- 
served which show that he already regarded the financial situation 
with great anxiety. 

He complained, above all, of the difficulty of obtaining money from 
Spain. All would come right in the end, but the state revenues were 
already pledged far ahead. If Erasso could still find people to deal 
with him, it could only be on the most unfavourable conditions. 'It 
is in truth a great harm to his Imperial Majesty that His Majesty will 
make war and borrow money on finance. These great lords might well 
lay aside their delight in wars.' Soon after he complains 'that in this 
Court no man considers aught and the debts which have been agreed 
with a binding promise are not paid. I hold that the Bishop of Arras 
should be spoken to touching this matter. A gift of 1,000 fl. should be 
made to Erasso, for thereby matters will be quickened. But to lend 
yet three or perchance four times in addition, at 80 kreuzer to the 
ducats, that is not to be done.' Then, again, he says: 'As to the nego- 
tiations touching Spain, I hold that great profit is to be made, the 
cause wherefore I withhold myself ye will have understood. I have no 
desire for such dealings, therefore enough of this. As to Erasso, he has 
so acted that I think not to deal with him and it is certain that he does 

111 service to his master, who, however, will have it so.' But these new 
good resolutions were once more to be thrown to the winds. 

There are also plenty of expressions of disapproval as to the German 
policy of the Emperor. 'It is not good that His Imperial Majesty 
cometh not (to the Empire) and that the Diet falls into the water and 
Germany becometh a bears' den where each man doeth what he 

Matthew Oertel had raised much money at interest in Antwerp in 
order to cover the large advances of the year 1553. Anton Fugger, too, 
owed large sums in South Germany on his private account. In February 
1554, 30,000 fl. fell due for payment, and we note with astonishment 
that there is difficulty in raising the money for this. Anton Fugger 
repeatedly ordered Oertel to raise the money to send to Augsburg at 
any price 'for my credit stands thereon,' and, again, 'I think as much 
on men's mockery as on the money itself.' This was a threatening symp- 
tom of the coming ruin. There was no escape from debt except by 
bringing money from Spain, which needed special arrangements. Be- 


fore dealing with this we must briefly consider the whole situation of the 
firm as shown in the balance sheet drawn up at the end of 1553. We 
must bear in mind, however, that a part of the pending business was 
undertaken on Anton Fugger's private account and does not appear 
in the balance sheet of the firm. 

According to the balance sheet of 1546 a capital of about 4J million 
gulden was brought forward. Since this time, however, more than 
2 millions had been paid out to the members of the firm, so that the 
balance sheet of 1553 shows only 2,327,276 fl. as capital brought for- 
ward. As the assets of the firm now amount to 3,248,794 fl., the profit 
for seven years amounts to 921,518 fl., or about 5| per cent, per annum. 
We note the following items under the heading 'Debtors': 


The members of the firm 1,500,000 

Spanish business 1,200,000 

The Treasury of the Netherlands 400,000 

Other outstanding claims: 

In Antwerp 100,000 

In Lisbon 300,000 

King Ferdinand 270,000 

The liabilities amounted only to 1,100,000 fl., distributed as follows: 


Antwerp 360,000 

Augsburg 200,000 

Spain 320,000 

These are all relatively small sums, and the whole situation of the 
business appears accordingly in a very favourable light. Apart, how- 
ever, from Anton Fugger's new private undertakings, the old arrears 
were probably paid partly in kind, so that the actual state was not 
nearly so good. However, the family might well have been thankful if 
their property had remained at the 1553 level. 

Anton Fugger's ceaseless efforts to get money out of Spain were 
chiefly in respect of his private undertakings, which had grown to a 
gigantic size since Villach. When Charles' son Philip was expected 
from Spain in the Netherlands, Anton Fugger ordered that a great 
quantity of silver should be sent secretly with him on his ships, and this 
appears actually to have been done. At any rate, at the end of 1553, 
200,000 ducats of silver arrived for the Fugger in Antwerp; and in the 
following year it was hoped to extract a further sum of 300,000 ducats, 
though it was extraordinarily difficult to obtain permission from Spain. 


It was lucky for every one who had outstanding claims in Spain that 
Philip was marrying Queen Mary of England. She needed money, and 
Gresham, who was sent to Antwerp to raise it, found this extremely 
difficult owing to the prevailing tightness. He was therefore overjoyed 
when some Genoese and also the Fugger's agent, Oertel, promised him a 
loan of 300,000 ducats, if provided with the Emperor's permit. He him- 
self would collect the money in Spain. The business materialized be- 
cause the Emperor wished to oblige Queen Mary. Anton Fugger was 
interested to the extent of 12,750 ducats. 

In 1554 the Fugger do not seem to have done much business. They 
lent the Duke of Florence 75,000 scudi at 12 per cent., selling him at the 
same time a jewel for 23,600 scudi, which the Duke continued to owe 
them. They also helped King Ferdinand with 56,000 thalers. These 
were undertakings when the money had to remain out several years, but 
they are not of the unmanageable type of the Spanish and Netherlands 

We shall see later, in 1555 and 1556, how fearfully the war increased 
the debts of the Spanish Crown and the Netherlands. In 1555 Erasso 
came from England, where King Philip then was, in order to borrow 
money in Antwerp, which after much trouble he succeeded in doing. 
The Fugger lent the largest sum -200,000 crowns. 1 We do not know 
how Erasso managed to induce Oertel to undertake this business, and 
whether the consent of Anton Fugger was obtained. Anyhow, this trans- 
action opened for the Fugger an area of new large loans in which there 
seems to have been no holding back. The Antwerp Bourse proved fatal 
to them, as it had to many other merchants. 

Antwerp had steadily grown in importance for the Fugger in the half - 
century in which they had done business there. In the first few decades 
they had mainly used it for selling spices and Hungarian and Tyrolese 
copper. This, however, did not mean that financial transactions were 
excluded, but for a long time these were confined to bills and certain 
dealings with the Antwerp agent of the King of Portugal, mostly on a 
basis of copper and pepper. It was only in the 'forties of the century 
that the Fugger began regularly to borrow money on the Antwerp 
Bourse on 'deposit,' and this method had become more and more indis- 
pensable to them as a means of raising money. At the same time, there 
is an increase of active credit business in Antwerp; since 1545 there had 
been many such transactions with the Court of the Netherlands, the 
city of Antwerp, and the English Crown. All the large loans which were 
critical for the situation of the firm were at that time always managed in 
South Germany by the head of the firm himself. This arrangement was 

Ct R. Bnmn, Calendar VI, 48. 


now first altered, the year 1552 being the first of this new phase. 
Matthew Oertel is now repeatedly mentioned as the independent agent 
for large loans to the Brussels Court; and when, after the Villach 
loan, the 250,000 ducats promised by Anton Fugger to the Emperor 
were to be used in the Netherlands and not in Italy, negotiations as to 
the settlement of this business were carried on with Oertel. The large 
undertakings of the year 1553 were all concluded in Antwerp, and this 
remained the usual way for some considerable time. 

Charles V made over the government of the Netherlands to his son, 
in October, 1555, leaving him such severe financial difficulties that, as 
Philip said later, it was impossible to fulfil his engagements, which he 
would gladly have done, 'even with his own blood.' The war with 
France, moreover, continued to require an ever increasing amount of 
money. In the following two years, as we shall see, the debts of the 
Netherlands rose to a crazy height. The Antwerp Bourse was seized with 
a credit mania of the worst type, which did not leave Matthew Oertel 
exempt. How far Anton Fugger himself was affected we have not suffi- 
cient material to show. It is, however, scarcely conceivable that the 
agent should have concluded loans on such a scale without the consent of 

We have the German and French text of a deed, dated 1st February, 
1556, under which Matthew Oertel, agent for Anton Fugger and 
Nephews, undertook to pay King Philip in ready money a sum not 
exceeding 400,000 ducats, payable in Spain, so that the King might pay 
his Spanish soldiers and so prevent their excesses. Oertel had promised 
this on condition that the King should give a bond on secure revenues 
for everything he owed the Fugger, inclusive of interest at 12 per cent. 
The highest officials of the Netherlands were guarantors in their own 
persons for the repayment, and for greater security the first 'aide' which 
the States General of the Netherlands should grant the King was 
pledged to the Fugger. 

In the beginning of April, 1556, the Fugger accordingly took over 
more than 1J millions' worth in Caroms gulden of Netherlands bonds of 
the Receivers General, for which the King did not give security in the 
first place, but which bore the signatures of the Eeceivers General of 
the different provinces, so that the creditors had recourse against the 
Receivers, while the King's promise, which was not secured on any 
definite revenues, was quite valueless. 

These bonds had for some time been considered an unsafe invest- 
ment, and the Fugger now staked on them 600,000 ducats, i.e. 50 
per cent, more than Anton Fugger, after months of negotiation in 
Villach, had lent the Emperor in his extremity on security of much 
greater value. 


This, however, was not yet all. The 400,000 ducats which Oertel had 
advanced for payment in Spain proved to be not nearly sufficient. 
They grew to 540,000 ducats. Besides this the Fugger had already lent 
the King 112,000 ducats in the autumn of 1656; and in the year 1556 
sums of 30,000 and 40,000 ducats were advanced in addition, the last 
sum being secured on the rich silver mines of Guadalcanal, which were 
then just discovered. In the beginning of 1557, Oertel, in the Nether- 
lands, advanced 430,000 ducats for repayment 'from the first gold and 
silver that shall come from India.' 

So the thing went on. Instead of the Fugger having their old ad- 
vances repaid, they had to lend the House of Austria, in a space of one 
and a half years, more money than they had ever lent before in so short a 
time. Erasso fairly pumped them dry; and they got no thanks for this 

In April, 1557, Oertel wrote to Anton Fugger: 'I wot not how to bring 
it about to make Erasso our friend, for I have never yet met his like, for 
he speaks a man fair to his face and behind his back saith ever the con- 
trary. He agreeth with no one in Summa save with his own agents whom 
he hath created that they may do his pleasure in all things. Now that is 
not your Honour's way, and from us he hath had little in gifts and the 
like. This brings upon us more disfavour and weary running to and fro 
than ought else; for he and his men say to all men that from no one do 
they have so much trouble and so little profit as from us.' 1 

As Erasso was already a rich man from the bribes he had taken for 
fourteen years, he paid no attention to small 'gifts.' Oertel, neverthe- 
less, tried to win him over; but Erasso accepted the services with 
thanks and did exactly as he pleased. He could easily, Oertel writes, 
make all quits again, 'though his nature seldom or never allows it to 

The Fugger and the financial Crisis of 1557. In the spring of 1557 the 
over expansion of credit in Antwerp had reached the danger-point. The 
quarterly payments were deferred by the King's Order; and even the 
city of Antwerp, which had strained its credit to the utmost, availed 
itself of this means of escape, which was the equivalent of a moratorium. 
We must deal next with the Fugger's share in the events which, in the 
course of the years 1557-62, shook the finance and trade of Europe to its 

In the summer of 1557 "King Philip ordered that no further payments 
were to be made to his creditors either in Spain or the Netherlands, and 
he confiscated two Spanish cargoes of silver for Flanders, valued air 
570,000 ducats, for the Fugger. The anger and anxiety of old Anton 

1 Pa-piers d'Etat du Cardinal de GranveOa V, 683. 


Fugger knew no bounds, and Oertel tried in vain to quiet him. When all 
that was known was the delay in the King's payments he wrote to 
Anton Fugger: 'As in South Germany people make so much ado and 
hold our Krng for bankrupt and have served France again with 300,000 
crowns, I would gladly hear what the evil speakers say now that the 
Frenchman has met with a reverse of fortune before St. Quentin.' 
Oertel had entreated the King to keep his engagements to the Fugger, 
saying that he would undertake for his masters that they should again 
serve the King if he needed money. Erasso had, however, replied that 
Anton Fugger had already prayed the King to trouble him no further for 
loans, because he would have peace. 

To this Oertel made the rejoinder: 'That the Fugger had never de- 
serted His Majesty in his need, but in the space of 1 years had served 
him with 1$ million of gold.' 

All this, however, availed nothing. The "King told the agent twice 
that he did it with as great unwillingness as he had ever done anything 
yet, but his great necessity forced him thereto, lest people took hurt 
from the armies. Nevertheless, Oertel says in the same letter that the 
whole thing was chiefly due to Erasso, who had never been willing that 
the Fugger should be paid what was due to them in Spain. He added, it 
was now too late to win Erasso with money, 'the matter had gone too 

Anton Fugger bitterly reproached the agent for his arbitrary be- 
haviour which had led to such great losses. He had written to him many 
times that he was not to trust the Court. 'The devil thank you for this 
agency.' In order 'to sleep in peace' he withdrew from Oertel his power 
to lend money on his account or that of the firm, and soon after dis- 
missed him from his service. Oertel, however, asserted that he had 
always acted with his master's consent; but he is not to be exonerated of 
an undue optimism, and his view must have determined that of Anton 
Fugger, who was at a distance and getting old. If he had undertaken the 
new large business only under the impression that he was securing the 
Fugger's old claims, he might be less severely judged. It is, however, 
probable that he was interested largely on his own account, for he left 
the service of the Fugger a rich man, while his masters had suffered 
enormous losses. 

Anton Fugger wanted to come himself to Antwerp. Instead of doing 
so, however, he sent his son Hans, who together with the agent, Se- 
bastian Kurz, had the difficult task of saving what it was possible to 
save, especially getting in the outstanding claims in order to pay off the 
debts. 'The creditors are many,' Anton Fugger wrote in 1568. 'A man 
might shudder to think of them.' At first, however, there was no possi- 
bility of paying them off. 


In the following years the Fugger had themselves to seek more credits. 
They borrowed large sums in Antwerp, usually at 8-10 per cent, per 
annum, and their credit was so good that in the general mistrust and the 
absence of 'good borrowers' every one 'looked out for the Fugger Bonds.' 
This state of things only changed with the death of Anton Fugger. 

We have a general statement of the year 1558 of the Fugger claims 
against King Philip in Spain only, that is exclusively the Netherlands 
claims. These amounted to a total of 1,660,809 ducats. To this was to 
be added the silver which had been taken from them, the value of which 
on the 25th May, 1559, the King promised to pay. Inclusive of 14 per 
cent, interest the amount was to be 762,262 crowns (100 crowns = about 
94 Spanish ducats of 11 reals). There was, however, no prospect of 
repayment. The credit of the Fugger remained good and they borrowed 
considerable sums during the year 1560, both in Antwerp and Nurem- 
berg, at the moderate rate for those days of 7-8 per cent. 

As the promised repayment of the confiscated money did not take 
place, the Fugger's Spanish claim, inclusive of interest at 12-14 per 
cent., rose at the end of 1560 to almost 3 million ducats or 4 million 

As the Fugger's own capital only amounted to 2 million, the house 
was already in a highly dangerous state. In addition it had outstanding 
claims in the Netherlands amounting to about 1 million gulden. The 
debt of the Netherlands Receivers General, amounting to 900,000 
gulden, must, however, be regarded as practically worthless, as the 
States General refused to be responsible for it. 

The Court of Spain made the Fugger a proposal for a composition of 
their Spanish claim. Under this arrangement the interest was to be 
reduced to 5 per cent., and great losses of capital would have resulted in 
addition. The Fugger accordingly did not agree, in the hope that their 
help would again be needed and their original contracts would then have 
to be confirmed. This hope, however, was not fulfilled, for - as the 
Venetian envoy Tiepolo wrote in January, 1560, from Spain -the 
Genoese were more resourceful and enterprising than the Fugger. They 
had for the most part had their claims repaid during the war on the 
occasion of new loans, while the Fugger meanwhile had had to stand 
idly by while their claims grew with the added interest. Accordingly, 
Anton's eldest nephew, Hans Jakob Fugger, was sent to Spain to make 
an agreement, which, however, did not come about till two years later. 1 

We note with astonishment that at this critical moment the Fugger 

allowed themselves to begin new loan business. In February, 1559, 

Hans Fugger in Antwerp lent Queen Elizabeth, through the agency of 

Gresham, about 10,000 fl. for one year, this being the only financial 

Brown, Calendar VII, 142. 


dealings which the Fugger undertook with the heretic Queen. 1 In the 
same year they advanced to the Duke of Alba 11,853 fl., and to the 
Emperor Ferdinand in 1560 a loan of 40,000 fl. without interest, secured 
on the salt offices of Vienna and Aussee; and to Ferdinand's son Maxi- 
milian 30,000 fl. at 10 per cent. 

The Fugger were so closely linked with the Hapsburgs that even at 
such a time they could not escape from their demands for money. It is, 
however, to be supposed that Anton Fugger himself no longer troubled 
as to the details of the business, while his younger kinsmen viewed the 

Anton Fugger' a End. His Importance. On llth July, 1560, Anton 
Fugger, then old and in ill-health, added a codicil to his will made ten 
years earlier making special dispositions as to the future management 
of the Fugger business. He had spoken seriously to his eldest nephew 
Hans Jakob, asking him to take over the direction of the business. He 
had, however, declined on the ground that the business of the city and 
his own affairs gave him so much to do that he could not act as head of 
the business. Thereupon Anton had turned to Hans Jakob's brother, 
George, and had received a blunt refusal. 'He could not do the work,' he 
said, 'and would far rather live in peace.' Anton fared no better with his 
third nephew, Christopher, though he represented to him very press- 
ingly that in bis youth he had been most employed in trade in Tyrol, 
Antwerp, and Spain. Anton Fugger, in his codicil, speaks with some 
bitterness of these vain attempts. His fourth nephew Baymund had 
bad health, and therefore was no use in business, and Anton's own sons 
were too young to direct the business on their own account. He there- 
fore laid it down that Hans Jakob must take up the burden together 
with his (Anton's) eldest son Marx. They must bear in mind the liquida- 
tion of the business as soon as possible; they must leave the name of the 
firm unaltered for six years more; and after the business was brought to 
a close they must carefully keep the most important business papers for 
the good of our Posterity in case of need.' The directions for the pre- 
servation of these papers and for all the circumstances connected with 
the business are extraordinarily detailed. In another codicil he forbade 
his successors to sell any of the landed estates. All this clearly shows 
that at the time of his death, on 14th September, 1560, he was full of 
anxiety for the future of his house. 

His nephew, Hans Jakob, in the Secret Book of Honour of the family 
which he composed in 1546, is not able to tell us much about Anton. He 

1 The text of Elizabeth's promissory note in the Fugger archives (48/6). The 
interest ia added to the capital and ia designated 'dicto Joanni (Fucker) in re- 
muneratione et premium (sic!) laborum suorum ex nostra mera libeialitate et 
favore donavimus.' 


was 'as the eldest of the Fugger house right active and diligent in the 
guidance thereof, soft of speech, great in counsel and apt knowledge- 

We learn from another source that his motto was 'Silence is golden.' 
These traits are insufficient for us to judge the character of the man who 
worked in the Fugger business for almost half a century and was its sole 
director for thirty years. It is a proof of his extraordinary intelligence 
that he was able throughout this long period to keep his house, at least 
to the outward eye, in the pre-eminent position to which Jakob Fugger 
had raised it, so that the Florentine Guicciardini, in a description of the 
Netherlands which appeared soon after Anton's death, describes him, 
with reference to the respect paid him in Antwerp, as 'a real prince 
among the other merchants.' Though he may have lacked the commer- 
cial genius of Jakob Fugger, yet his 'knowledgeablenesa' proved a still 
more precious quality in a far more difficult time and in the work of keep- 
ing what had been already won. This quality only deserted him in his 
last days, or, rather, the weariness which had seized on a nature in any 
case not sufficiently energetic to deal with the difficulties of the situation, 
deprived him of the power of withstanding the speculative tendencies of 
his Antwerp agent, Matthew Oertel. 

The Fugger had to pay dearly for the too intimate connection of 
their fate with the over-speculation of the Antwerp Bourse. 

The Atteged Burning of the Notes of Hand of Charles V. We may here 
mention the anecdote of Anton Fugger' s burning one of Charles V's 
notes of hand in his presence. This story is not mentioned either in the 
Fugger business papers or in the 'Description of the Fugger 5 drawn up 
from the family papers at the end of the sixteenth century. The ver- 
sions of the story differ in time and place, and are also recounted of 
many other rich merchants. For instance, the same story is told by 
Gasoni of Centurione; and in the Netherlands, not only in connection 
with Anton Fugger, but also with the Antwerp merchant Jan Daem, 
and of the Florentine Gaspar Ducci. The story is first told of Anton 
Fugger in a magazine called the Journal des Savons of the year 1685, and 
the other versions also seem to have arisen in the seventeenth century, 
a poverty-stricken time which was inclined to embellish the now legend- 
ary riches of the financial princes of the sixteenth century with such 
romantic tales. 

In the Fugger archives I found a short statement drawn up by Dr. 
Holtzapfel, an administrator of the Fugger property in Spain. This was 
evidently meant as part of a memorandum setting forth the services of 
the Fngger to the House of Austria in an attempt to get some payments 
on enormous sums due from the Spanish Crown and thus to check the 
further decline in the fortunes of the house. This statement says: 'As 


Emperor Charles (after the taking of Ingolstadt in 1546) came again 
and once more desired money of Master Anton, the same answered him 
that lie had means in the Netherlands wherewith he would and could 
serve His Majesty, which was most fortunate; but in Germany he had 
no other means save certain bills of His Majesty, which he had torn up 
or burnt in order that His Majesty might see that he was jealous to 
serve him with all his substance.' 

In this form the anecdote seems more probable, especially if we 
suppose that it was a case of a clever coup de theatre. We know that 
after the taking of Ingolstadt in September or October, 1546, Anton 
Fugger advanced to the Emperor the necessary means for the overthrow 
of the South German Protestants, bringing money from the Netherlands 
for this purpose. The Emperor, on the other hand, may have demanded 
immediate payment in South Germany. It may be that Anton Fugger 
took this drastic step as a means of making more impressive his asser- 
tion that payment in South Germany was impossible. The story would 
be more credible, however, if it had been placed a year later, when he 
was already 'weary.' 



The Third Generation. Ems Jakob Fugger. The Fugger business had 
now arrived at the critical third generation, which was to prove fatal in 
this case also. Hans Jakob Fugger, the eldest nephew who under Anton's 
will had to take over the direction of the business in conjunction with 
Marx, Anton's eldest son, was by no means equal to his task. A patron 
of art and learning and a passionate collector, he was much occupied 
with such pursuits and his personal relations with princes, especially the 
Dukes of Bavaria. These preoccupations and a more cavalier concep- 
tion of the nature of business prevented him from devoting himself to 
details, in the manner which, in view of the situation of the house, was 
then doubly necessary. Anton's eldest son, Marx, later showed himself 
at least a cautious man of business; but even when he was set free 
from the unlucky influence of Hans Jakob, he did not understand 
how to bring to bear sufficient caution nor yet sufficient brilliance and 
energy in the introduction of new business. Moreover, even before 
Anton Fugger's death the Genoese had known how to render them- 
selves indispensable to the Spanish Court, while the Fugger, tied by their 
past and their lack of enterprise, were kept to the Spanish business and 
the old markets, and were prevented from making use of the fresh 
centres of trade and finance which were then developing. The decline of 
the house and its riches was therefore invevitable. 


The name of the firm 'Anton Fugger and Nephews' remained at first 
unaltered, much longer indeed than the period laid down in Anton's 
will; but their credit fell with striking rapidity. While in 1560 in Ant- 
werp 'the Fugger Bond' was considered the safest of investments and 
they had to pay less for their loans than any other firm, or even the city 
of Antwerp itself, in the following year it was reported that the Fugger 
were making continual efforts to remit money from Antwerp to South 
Germany in order to pay their debts there, for they had previously 
borrowed money wherever they could and paid off long-standing credi- 
tors who were already pressing them. In the beginning of September, 
1561, some South German merchants, who had lent the bankrupt 
Courts of Spain, France and Portugal more than they themselves pos- 
sessed, had to cease payment; and, as Sir Thomas Gresham reports from 
Antwerp, anxiety was felt there on the Fugger's account. 1 Their credit 
only improved again when in 1562 they came to an arrangement with the 
Spanish Court as to the gradual paying off of the gigantic sums due to 
them. Even then, in order to fulfil their obligations, they had to borrow 
large amounts on unfavourable conditions. The most important and 
characteristic transaction of this kind may be mentioned here. 

In 1563 the Fugger borrowed from the Spanish usurer Juan de Curiel 
della Torre 300,000 crowns at 10 per cent, per annum - not a very high 
rate for those days of monetary shortage. Juan de Curiel gave the 
Fugger 100,000 crowns of Spanish annuities, which were then worth only 
half their normal value. The Fugger had accordingly to write off so 
much, which made the real rate of interest much higher. It is not clear 
for how long they continued to owe this money; if for two years, they 
lost on the 250,000 crowns in each year 55,000 crowns, i.e. 22 per cent. 
This was the more scandalous as the creditor had then, through Erasso's 
agency, forced the Fugger out of the lease of the Maestrazgos. 2 

The composition which the Fugger made with the Spanish financial 
administration as to their outstanding claims on 26th August, 1562, 
was considerably less favourable than the arrangements with the other 
creditors, who had come to an agreement earlier. Their interest was 
cut down and they were given a charge on Spanish annuities and landed 
estates, on which they inevitably lost heavily. Moreover, they were 
compelled to take over the lease of the Maestrazgos at an extremely high 
price. The worst point, however, was the long time over which lie 
repayment was distributed. 

State of the Business in the year 1563. We have a balance sheet of 
the Fugger of 1563. 

1 Kervyn de Lettenhove, Rdat. polit. II, 618, III, 113. 

FuggeivArohiv, 2, 1, 1 foL 260; 2, 5, 13, 21 January, 1576. 


The assets are as follows: 

I. (1) Spanish claims against the King 

(2) Juros at 5 per cent, taken from Juan de Curiel 
as part of the loan mentioned above 



To be written off: 
$ of the Juros (which, however, entailed 

a greater loss) 
J of the landed estate 


Interest to the end of 1563 


= fl. 3,605,913 

Total fl. 4,445,135 

II. Other Assets in Spain: Florins 

(1) Cash 27,774 

(2) Old arrears still regarded as good from the 

lease of the Maestrazgos, 15/8/50 58,877 

(3) Other good debts 97,933 

Total 184,584 

III. Antwerp Assets: 

(1) (a) Seven cities in Flanders 

(6) 'Must pay daily together all Interest, but 
because we do not know the rate, we only 
reckon by Rentas, 6J per cent. Easter 
Market, 1560, to Pamas Market, 1563,' 
therefore interest 

(2) (a) Duke of Alba, 1559 
(b) Duke of Alba, 1561 

(3) King of Portugal of 1561 

(4) City of Antwerp 

(5) States of Brabant 

(6) Hans Jakob Fugger 

(7) King Philip 

(8) Duke of Alba, once again 

(9) Other Debtors 
(10) Cash 

Total fl. 


= fl. 782,694 


IV. Augsburg Assets: Fiorina 

(1) Emperor Ferdinand, 1560, lent without interest 40,000 

(2) King Maximilian 30,000 

(3) Archduke Ferdinand 4,680 

(4) Members of the Fugger family 24,700 

(5) Various debtors 23,101 

(6) Gash 41,435 

fl. 163,816 


V. Nuremberg and Vienna Assets 28,616 

VI. Assets in the 'Chief Book': 

(1) Landed property in Antwerp 15,000 

Goods and stock 9,000 

Goods in transit 32,548 

fl. 56,548 

Total Assets fl. 5,661,393 

This total does not contain: (i) the amounts already written oft as 
losses on the Spanish and other assets amounting to 613,000 fl.; (ii) the 
Netherlands bonds of the Receivers General to the amount of 95,314 ft. 
= 430,000 fl. It should be noted that a great part of the Exchequer 
bonds had already been distributed to different members of the family. 

The Liabilities fall into the following chief categories: 

I. Shares in the business: Florins 

(1) Anton Fugger's heirs 1,246,350 

(2) Hans Jakob Fugger 562,065 

(3) George Fugger 28,092 

(4) Christopher Fugger 38,738 

(5) Ulrich Fugger 66,981 

(6) Raymund Fugger 77,998 

II. Spanish Creditors: 

(1) Christopher Fugger ducats 306,602 

(2) Duke of Alba 24,000 

(3) Juan de Curiel della Torre 335,250 

(4) Various 29,698 


in. Creditors in Antwerp: 

Deposits repayable in the course of Florins 

1563 1,967,805 

IV. Creditors in Augsburg: 

Schwatz trade fl. 59,158 

Deposits 38,000 

- = - 97,158 

V. Creditors in the 'Chief Book': 

Unsettled bills and deposits 301,000 

VI. Other creditors 84,267 

Total Liabilities fl. 5,399,188 
The chief heads of the balance sheet are therefore: 

Mil], fl. Mill fl. 


King Philip in Spain 444 Business Capital 2-00 

Other Spanish Assets -18 Deposits of members of the 

Other claims on Princes and family -40 

Cities -50 Deposits of strangers 2-70 

Claims on members of the Other liabilities -30 

Fugger family -37 

Other assets -17 

If we compare this balance sheet with those of 1546 and 1553 we first 
miss the 'Landed Property,' then notice the absence of dealings in com- 
modities. We notice, thirdly, the relative sroallness of the business 
capital and the general unhealthy state of affairs, financially speaking. 
Fourthly, we see that the Spanish business is now all important, only 
Antwerp being at all considerable besides, all other business connections 
having ceased or become quite unimportant. 

The Netherlands Bonds of the Beceivers General held by the Fugger 
had amounted in 1556 to the huge sum of 200,000 fl., or 600,000 
ducats. In 1557 the Receivers General ceased payment, which was not 
resumed, because the States General would not recognize the debt. 
The bonds were therefore worthless. The Fugger allotted to Hans Jakob 
Fugger 32,103 , to George and Raymund Fugger 45,877 , and so on, 
while the firm only kept 95,314 , and these, as we have seen, were not 
entered among the assets. 


Marx Fugger and Brothers. At this time there were dissensions among 
the partners. Hans Jakob Fugger had borrowed enormous sums both 
on his own account and that of the firm and had begun several risky 
new undertakings. As a result, in 1563 he found himself in great diffi- 
culties, so that on account of his debts he had to leave Augsburg for his 
castle of Taufkkchen and afterwards to hand over to his creditors, not 
only this castle, but all his other property. Among his property was his 
interest in the Fugger business, amounting to 400,000 fl. The total of his 
debts on his own account amounted to more than a million. After much 
quarrelling an arrangement was made with the other partners under 
which Hans Jakob left the firm, which in its turn took over his debts in 
Augsburg. He had not enough left to bring up his large family properly, 
so he entered the service of Duke Albert of Bavaria and removed to 
Munich. He died in 1575, and his descendants never came back into the 

Hans Jakob's disappearance from the firm did not, however, mean 
the healing of the breach between him and the other members of the 
family: it even grew wider. His brothers George and Raymund died in 
1569, while Christopher, the last brother, in 1572 took up Hans Jakob's 
part and also left the firm after a quarrel. He owned a considerable 
amount of capital which had in great part to be paid over to him. (At 
his death, in 1579, he was regarded as the richest of the Fugger.) The 
firm was, therefore, considerably weakened by hisleaving it. Anton's sons, 
who remained as chief partners, were forced to bring in again a consider- 
able part of the private fortune which their father had with-drawn from 

the sole management, as his brothers refused to give him their support. 

After the death and departure of the four nephews of Anton Fugger 
his three sons, Marx, Hans, and Jakob, remained as the only partners, 
and the firm assumed the style of Marx Fugger and Brothers. In 1591 
Marx Fugger, on account of his advanced age, handed over the manage- 
ment to his brother Hans, who handed it down to his son Marx in 1597. 
The years 1597 and 1598 saw the deaths of Anton Fugger's three sons. 
After this it is unimportant who directed the business, which continued 
to decline. Even during the period when it was under Anton's sons it is 
not necessary to follow the course of events in detail. We will only 
mention a few outstanding facts. 

In 1572 King Philip II asked the Fugger for a loan of a million ducats. 
After a long resistance their Spanish factor said that his masters would 
advance 300,000 ducats. The Genoese Tommaso Fiesco came to Augs- 
burg from Antwerp as a representative of the King to try and induce the 
Fugger to make further advances. He pressed them so hard that they 
consented first to 50,000 fL, then to 80,000 fl., and finally to 


100,000 fl., on condition that they were allowed to give in payment 
the 19,244 of Netherlands bonds of the Beceivers General which be- 
longed to them personally. The Genoese, however, wanted more. The 
Fugger pointed to the great services they had rendered and the bad 
treatment they had often received, but Fiesco rejoined that the King 
was in great straits and must have more money. When he had finally 
succeeded in bargaining for the 100,000 fl. he turned the screw and 
demanded that the Fugger should give up their condition as to the bonds 
of the Receivers General which had been already more or less agreed, 
and that they should advance the 300,000 ducats at 12 per cent, uncon- 
ditionally. This demand called forth from the Fugger the following 
characteristic expression of opinion as to their Antwerp agent Jakob 
Mair: 'He is a sly cat, but doing business with Germans has a different 
sense from business with the English or Genoese, for at this time our 
affairs and all other businesses make as much ado to serve with 100,000 
crowns as with a million a few years since.' 

This is a clear indication of the situation of the house and of that of all 
the South German merchants. In Spain the Genoese had now taken the 
place of the Fugger, who, however, made many fresh advances to the 
King, though the Genoese produced incomparably larger sums. The 
Spanish bankers, too, began once more to be important, though they 
imposed harder conditions than the Fugger had done. The King ob- 
tained money, however, while the Fugger abstained as far as possible 
from fresh undertakings. Only by the threat that their old claims would 
remain unpaid could any money be squeezed out of them. On the other 
hand, the Fugger needed to bribe perpetually in order to obtain some of 
the promised repayments. Finally, in the general mistrust, the Spanish 
reserves of ready money, which could not be sent in natura, ceased to be 
able to be remitted by means of bills to Antwerp, Italy, and South Ger- 
many, so that the Fugger could not pay off their large burden of debt in 
those places. 

The Fugger and the Spanish Financial Crisis of 1575. We will deal 
later with the bad state of affairs prevalent at this time in Spain which 
resulted in the fearful catastrophe of the state bankruptcy of 1575. 
In the greatest extremity, when the Spaniards and Genoese themselves 
were bankrupt, the Fugger came once more to honour, for their credit 
at this time was not really shaken. They served the King over and 
over again with sums of from 100,000 to 150,000 crowns, which was 
then an extraordinary feat. Their reward for this was that they were 
better treated than the other creditors at the state bankruptcy -only, 
however, from the hope of further advances. Moreover, this roused the 
other creditors against the Fugger, so that they tried to do them at 
Court all the harm they could. 


The King urgently required to send money to the Netherlands, to 
satisfy the starving and mutinous troops. It was too dangerous to send 
large sums in cash, and there was no solvent business house except the 
Fugger who could do this through bills. They too were for long un- 
willing, for they did not know how they were going to get the money 
out of Spain or into the Netherlands. Finally their Spanish agent gave 
a hint that if the King would take the risk the matter might be con- 
sidered. This caused great joy, though only 100,000 crowns were in 
question. The King said that he 'would take it as a great favour.' 
The Fugger, however, ordered their agent, in order to keep up their 
credit, neither to borrow in Spain nor to have borrowing undertaken 
in Antwerp. 

The agent was in a tight place. When, in accordance with his in- 
structions, he refused to conclude the transaction, the King's Contador 
Garnica, who was otherwise exceedingly well disposed towards him, 
began to 'play a wild game and to say that the agent could not make 
it plainer that the Fugger had no wish to serve the King, and like the 
rest only sought for enormous profits.' Finally the agent had to agree 
to send 70,000 crowns to the Netherlands 'for (as he said in his letter 
to another agent) here a man may not conclude a bargain without 
more and go care-free home again, but must bear ever in mind that 
the masters have stuck fast almost 3 million of gold at the King's 
back without counting the wheat and debts in the Maestrazgos.' 

The money was packed in chests, sealed with the King's seal, and 
sent through Lisbon to Antwerp. 

Direct bill transactions between Spain and Antwerp were now abso- 
lute; but the Fugger were very nervous about using the new markets, 
especially the Genoese bill fairs, but also Lisbon, Lyons, and Florence. 
In the case of the necessary remittances from Spain their attitude, 
which was a cautiousness understandable at such a time, gave the 
Spanish agent many sleepless nights. Finally he decided to act against his 
instructions and make use of the new markets. In this way he managed, 
between the winter of 1575 and the spring of 1578, to remit through bills 
about 2 million crowns, which enabled the Fugger to pay off part of their 
debts. In other ways as well the agent, Thomas Muller, showed him- 
self a business man of exceptional ability. He was able to check those 
who hated and envied the Fugger at Court and to keep the King's 
favour for his masters. This, however, was only to be achieved by 
means of fresh services, so that the Fugger perpetually reproached 

In the beginning of August, 1576, dangerous mutinies of the Spanish 
troops were reported from the Netherlands. The Contador Garnica 
immediately asked Thomas Muller to send 200,000 crowns to the 


Netherlands, for the Fugger should not desert the King in his hour of 
need. If the tioops were not satisfied, the Netherlands provinces would 
be lost and the Fugger would be responsible. In vain the agent declined, 
Garnica pressed for immediate consent. As soon as the soldiers saw 
the Fugger bills, he said, they would be quiet and wait till the money 
was collected. He said he must have an answer next day, and he even 
sent his agent the same night, saying that the Fugger must help or 
they would know what to expect. When Muller announced that the 
Fugger had always been faithful servants of the King and he did not 
know, therefore, what should happen to them, the Spaniard made a 
cross, kissed it, and cried out, 'I swear on the Holy Cross, if Flanders 
is lost from lack of money, the blame will be yours.' The interview 
continued for some time in this passionate tone, but the agent stood 
his ground. Late at night he paid a visit to President Hopperus, 'an 
upright, trusty man,' as he wrote to his masters, 'my kind master and 
well affected towards your Honour.' The President, however, said the 
same as the Contador and entreated the agent for Heaven's sake to 
prove that the Fugger were true servants of the King. Not only he, but 
the whole Netherlands would owe their eternal gratitude. 

The same night the King wrote to the agent and said in full Council 
that no one but the Fugger could help him in his extremity, and that 
this would be the last service of the kind that he would require of 

Muller tried first and foremost to protect his masters against the 
danger which threatened more and more, of being drawn into the 
state bankruptcy, or 'Decree' as it was called. This danger was one 
of the chief reasons, he said, why the Fugger should not commit them- 
selves more deeply with the King, 'chiefly in view of the little money 
at the disposition of the merchants of all nations, for though the 
Fugger be great, yet can they not make money out of stone.' Finally, 
however, 'in order not to spill the soup,' he had to say, without, how- 
ever, giving a binding promise on account of the Decree, that he would 
send 200,000 crowns to Flanders, which he was able to do in round- 
about ways through skilful bill transactions. 

The King was greatly pleased by this service; he wrote that he 'held 
it a great matter.' But it did not suffice to stay the catastrophe then 
threatening the Netherlands. On November the Spanish armies sacked 
Antwerp, thereby ruining its commercial prosperity. Many merchants 
had recently left the city. The Fugger's agent had to remain in order 
to guard the money for the Spanish bills drawn for the King. When 
the mutinous troops stormed the city, the Fugger house was surrounded 
by Alvarez Juan Giron and his men. In order to guard against further 
losses the agent had to pay him 11,000 crowns, his original demands 


having been more. Moreover, the troops stole more than 2,000 out 
of a larger sum of money committed to them for safe keeping by a 
friendly firm. To crown all, the Colonel Carl Fugger, a kinsman, who 
had brought there in 1573 a regiment recruited in Augsburg for the 
Duke of Alba, came to the Fugger house threatening to plunder if he 
were not bought off with 50,000 crowns. He was with difficulty got 
rid of through the agency of a friendly member of the State Council. 
The great services they had rendered in the face of danger and the 
ceaseless efforts of their Spanish agent successfully kept the Fugger 
out of the Decree in spite of the machinations of their enemies. Towards 
other princes they held back as much as they could in the matter of 
loans. So, for example, in 1577 they refused a loan to Duke William of 
Bavaria on the ground that since the sack of Antwerp business was 
ruined, many bankruptcies were expected at the approaching Frankfurt 
Fair, and a great change in the general situation. They had, they said, 
no spare cash, and were themselves in great difficulties owing to the 
impossibility of getting in their outstanding claims, so that they had 
to give their whole attention to maintaining their own credit. The 
Duke was then owing them more than 100,000 fl. The Fugger also 
soundly declined to make any further advances in Spain. 

Sdlance Sheet of 1577 

We give here the balance sheet for 1577, the last we shall quote. 

The assets are as follows: Good Doubtful 

Florins Florins 

Spanish Debtors 5,026,000 

Antwerp Debtors 120,128 

Emperor Maxmilian II 220,674 

Archduke Ferdinand 12,874 

Archduke Albert in Bavaria 11,909 

for his son William 1,116,611 

Duchess Anna hi Bavaria, loan without interest 4,000 
Sundry Debtors in Augsburg 270,767 40,239 

Debtors in Nuremberg 29,204 2,222 

Debtors in Vienna 9,094 18,444 

Debtors in the Chief Book: 
Emperor Ferdinand has owed since 1547 on 

Kirchberg and Weissenhom 30,000 

Interest on this sum, 1557-77, 20 years, at 5 % 30,000 

Old arrears from the Maestrazgos 1,336 37,650 

Various (mostly unsettled bill transactions) 494,380 

Cash 241,082 

Total fl. 6,558,059 fl. 1,244,906 



Shares in the business 
Deposits by members of the family 3,398,000 

Spanish creditors, to be taken in connection with the assets 

(in round figures) 1,000,000 

Other pending transactions 277,806 

Deposits of friends, employes, etc. 591,150 

Total fl. 6,537,355 

This is a very different picture from the balance sheet of 1562. 
Instead of having to pay interest on 3 million of borrowed money, the 
members of the family had about this amount in outstanding claims. 
The soundness of the house had been re-established, though at great 
cost. Anton Pugger's heirs, besides their shares in the business, amount- 
ing to more than a million gulden, had had to advance on loan 
almost 2 million. The capital on deposit belonging to Christopher 
Fugger, amounting to 700,000 fl., was soon after paid out for the 
Spanish bills for the Netherlands, so that the frightful burden of the" 
Spanish business fell entirely on Anton's sons. But the fact that 1J 
million gulden must be classed as doubtful was still hidden in the 

Last Phase of the Fugger Business. There is in existence a letter of 
the year 1581 from the Fugger brothers to their brother-in-law Hans 
Khevenhiiller, who owed them 45,000 fl. They warned him very 
seriously about the repayment of this amount, saying that they had 
soon to lend a large sum to the Emperor, but from lack of ready 
money had themselves been compelled to borrow, and that they had to 
repay the loan. Moreover, they had to pay out 100,000 fl. to Georg 
Fugger's heirs. Money was as hard to come by in Augsburg as in other 
places and could not be brought from Spain without great danger and 
expense. In the years 1584 and 1585 the situation was the same. The 
Genoese had won the first place as international financiers. The Fugger 
complained that the Genoese 'everywhere brought the water all to 
their own mill.' A different story, indeed, since the Genoese at the time 
of the election of Charles V had complained of the harsh treatment 
they received from the Fugger. 

Nevertheless the Fugger did a considerable business till the end of 
the century, e.g. in the period 1594 to 1600 the profit made amounted 
to 575,397 fl.; in the next ten years, however, the loss amounted to 
about the same sum. The Spanish claims refused to diminish. In the 
year 1604 they amounted to about 5f million ducats, of which 5 million 
were debts of the Spanish Crown - these were, however, set off against 


liabilities amounting to almost 3 million, the King's account being 

2 million. 

In the year 1607 there was a Spanish State bankruptcy for the third 
time, in which the Fugger were interested to the extent of 3J million 
ducats. At this time they had paid out the greater part of the business 
capital, and the deposits of the different partners had been repaid to 
them. They owed 2 million to persons outside the firm, so that the 
situation of 1562 recurred. As in the first quarter day in Spain after 
the Decree there was 'a great run' of creditors, and there were even 
'executions.' The King helped with a moratorium, and when the Fugger 
represented to him that their whole capital was comprised in the claims 
on the Spanish Crown and that their honour and credit were in the 
greatest danger, if the charges on the state revenues, of which they 
had been deprived, were not restored, they got off once again with 
nothing worse than a fright. In the subsequent period, however, their 
situation became the more unsafe, because they made new advances 
to the Spanish Crown, and that for this purpose they themselves con- 
tracted new loans; the most dangerous point of all being that these 
loans were met by means of advances from their now all-powerful 
rivals, the Genoese. Their assets in Spain amounted in 1622 to 5| 
million ducats and their liabilities to 4J million, a most risky position, 
which would prove fatal if the equilibrium so painfully maintained were 
to be destroyed. This happened once more in the year 1626. The power- 
ful minister Olivarez, who hated the Fugger, demanded of them that 
they should take over the payments of 50,000 ducats a month for the 
maintenance of the Court, the so-called Mesadas. 

Andreas Hyrus, the Fugger's agent, made unavailing representations, 
and was himself at last intimidated or captivated. Olivarez said, 'The 
Asiento must come, even if the Fugger are ruined.' With great lack of 
consideration he demanded the continued payment of the Mesadas, 
although the assignments which had been given to the Fugger in 
return had not, for the most part, been realized. The Fugger had, 
moreover, to pay 200,000 ducats for annual interest on their debts in 
Spain and Italy. This was a state of things which could not continue. 

In the beginning of the year 1630, Octavio Centurione dared to say 
of the Fugger that their supposed riches were pure imagination. A few 
months later the Spanish agent had to write that he was in such dffii- 
culties on account of a debt of 34,000 ducats which had fallen due that 
he had thought that there would be 'a general break-up.' Finally, after 
many entreaties and promises, he induced the Genoese, Bart. Spinola, 
to take over the debt, so that the worst was staved off. Shortly after, 
however, the agent could only realize a bill of 5,000 crowns if Spinola 
added his signature. In the same year the agent Hyrus was removed. 


Next year the "King again granted a moratorium in order to shield the 
Fugger from their creditors, and this was further prolonged in 1632. 
In 1637, however, the Fugger estate in Spain came under the adminis- 
tration of the Genoese, among whom Bart. Spinola was chief creditor. 

As this administration only made matters worse, in 1639 Hyrus was 
sent back to Spain and remained there as liquidator till 1644, when 
another representative was sent out. A statement of the year 1641, 
which puts matters in too favourable a light, states the Spanish assets 
of the Fugger at 2,100 million maravedis, the liabilities at 1,250 
millions, a surplus of 850 millions. If we examine these figures, it is plain 
that the assets, i.e. the claims on the Crown and on others, amount 
to 1,327 million maravedis at most, or 3f million ducats, while the 
liabilities amount to 4J million ducats, leaving a deficit of over half a 
million ducats. This calculation assumes that all the outstanding claims 
would be paid, which was far from being the case. 

The Fugger business in Spain had reached this sad state through 
acting as we have seen. It had already had claims on the Spanish 
Crown amounting to over 3 million ducats, none of which was ever 
repaid. The loss incurred, inching the sums already written off, 
amounts to at least 4 million ducats. The Spanish line of the Hapsburgs 
remained in debt to the Fugger for this amount. To this must be added 
the Netherlands bonds of the Eeceivers General, the debt of the States 
of Brabant, which also was in fact never repaid, the so-called Friesland 
debt, an annual payment secured on the revenues of the Crown lands 
in Friesland which was not paid after the separation of this province. 
Other annual payments were continued by the provinces after their 
liberation, but the Fugger's was discontinued owing to the support 
which they were known to have afforded to the Spanish Crown. Many 
efforts were made to re-establish it, and Article 24 of the Treaty of 
Westphalia seemed to offer some hope of this, but this never materia- 
lized. In 1673 the arrears of the payment with interest and expenses 
amounted to 2 million gulden. 

In conclusion the Fugger had still in 1650 a claim against the Imperial 
line of the Hapsburgs amounting to 615,600 fl.- a debt which had 
originated in the years 1574 to 1617. The original capital had only 
been 144,000 fl., the rest being due to arrears of interest, though only 
8 per cent, was charged up to 1603, and after that date only 5-6 per 
cent. The total loss which the Fugger sustained on their claims against 
the Hapsburgs up to the middle of the seventeenth century is certainly 
not put too high at 8 million Rhenish gulden. We shall scarcely be 
wrong in supposing that the greater part of the Fugger's earnings in 
the course of a hundred years was lost in this way. At their most 
brilliant period, i.e. about the middle of the sixteenth century, the 


family had never owned more than 5 or 6 millions of the money of that 
day, even including the private fortunes of their individual members. 
In the Mowing half-century, in spite of the work of Anton Fugger and 
his sons, the property had not really increased. Only its nominal value 

another half-century was only some landed property which had been 
laid waste in the wars and was heavily mortgaged. The family laws 
as to inheritance, under which it descended in the male line and none 
of it could be sold, kept the lands more or less together in spite of the 
enormous families of many of the Fugger. (In 1619, for example, the 
family numbered a hundred persons.) 



IT was the rapid development of the silver mines of Tyrol, about the 
middle of the fifteenth century, which first induced the other South 
German business houses like the Fugger gradually to leave the old track 
of laborious but solid trade which centred in Venice. Perhaps it would 
be more accurate to express this change as follows: The decline of the 
profits of trade with Venice, etc., induced them to look for other means 
of gain, so they went into finance and mining in Tyrol and by the capital 
they put in brought the latter to a flourishing state. Further research is 
needed to show which of these two views is the correct one. 

The Meuting. As early as 1456 the Meutings of Augsburg lent 35,000 fl. 
to Duke Sigmund of Tyrol, who was known as 'the Munzreich,' but, all 
the same, was continually in need of money. Until it should be repaid 
the Duke made over to them, at the price of 7f fl. per mark (Vienna 
weight), all the silver produced from the works and delivered to him. 
Thereupon the Meuting must have gone into the business of money 
changers; for in 1475 the Bishop of Augsburg lodged a complaint to the 
Council there 'of the exchange, which Ulrich Meuting is in the habit of 
carrying on there, by reason whereof a master of the mint and his associ- 
ates were impeded in their rights,' and in the next year, in addition to 
Meuting, he named Ulrich Mayr and some others who had been guilty of 
the same trespass. In this department the new power of capital was 
already breaking through the barriers of the Middle Ages. 1 

In 1474 Ludwig Meuting already had business relations with the 
Emperor Frederick III, and as he soon afterwards got at variance with 
the town of Augsburg he obtained a safe conduct from the Emperor. 
This Ludwig Meuting is the first of the South German merchants to be 
mentioned in Antwerp. As early as 1479 he had to get in some out- 
standing debts there. Finally, George Meuting settled in Antwerp, 
married there in 1516, and in company with the well-known Gillebert 
van Schoonabeke went in for large speculation in real estate. Later, he 
carried on important financial business with the Court of Brussels, 
which appears to have brought nim down in 1537. The family, however, 
lasted on in Antwerp till 1820.* 

1 Ladurner ro Archiv. f. Geah. . AUerfkumskunde Tirole, voL V. Abo of. 
Augsburger Stadtarchw, Qrosse Kathsdekret-Sammlung, VII, 30 n. 52, and von 
Stetten, Gesch. d. avgsbutyer CteseMeckter, p. 186. 

'Chmel, Aktenstucke z. Gesch. d. Houses Habsburg,ni, 540, 609; also Actes 
scabinaux in Antwerp Stadtarchive, 1479, 25/10. Of. Annuaire de la noblesse de 
Bdgique, 1883, p. 332 ff.; Bulletin de la Propriete, 1887, p. 92. 


The Meuting who had remained behind in Augsburg played a not 
insignificant part in international finance for some decades longer 
than their relatives in Antwerp. Bemhard Meuting in 1543 took a 
share of 29,000 pounds in the Antwerp loan to the Court of Brussels. 
The Meuting were one of the Augsburg business houses who were 
suspected of supporting the Emperor in the Schmalkaldian war. King 
Ferdinand got a loan of 25,000 ft. from Jacob Meuting in 1549 and 
another of 100,000 fl. in 1551. On the other hand, in 1553 Bernhard 
and Philip Meuting took a share of 43,735 crowns in Lyons in the 
great loan to the King of France. In this they appear as citizens of 
Berne. Bernard Meuting was one of the first victims of the great credit 
crisis of 1557-62. It appears, nevertheless, that other members of 
the family carried on business after this, for in 1566 the Emperor 
Maximilian II obtained a loan from the Meuting. 1 

Mining, Smelting and Iron Works. The business houses of Nuremberg 
and Augsburg took an early part in the silver mining of Saxony. From 
the records in the Archives of the Imhof families we learn that by 1479 
Cunz Imhof and Heinrich Wolff in Nuremberg, and Lucas Welser in 
Augsburg, held some shares in the silver mining works at the Schnee- 
berg. Soon after we come across the Nuremberg families of Fiihrer and 
Schlusselfelder as undertakers of the copper mining works at Eisleben 
with which was connected the important Saiger smelting works at 
Armstedt in Thuringia. In 1511 there are mentioned as undertakers of 
ironworks the Nuremberg merchants Hans Kress, Paul Heymer, and 
Sebald Ketzel. Further, at that time Peter Riimmel carried on silver 
mining in Tyrol, and Lucas Sender smelting works in Silesia; Mathias 
Landaur and Hans and Gregory Schiitze also carried on smelting works. 
In 1482 George Holzschuher and Ulrich Erkel of Nuremberg had the 
monopoly of supplying silver to the town of Berne, whose mint Holz- 
schuher managed through his people. 2 We shall see later that the 
Welser, too, then already carried on similar businesses. 

The Emperor Maximilian and the South German Merchants. There is 
a certain homely romantic charm in the relations of Maximilian to the 
burghers of the imperial towns of South Germany. It still gives us 
pleasure to read how the Emperor lived among his true burghers and 
danced with their wives and daughters at the town hall. But on both 
sides the very real basis of _these beautiful relations was a monetary one. 
A contemporary chronicler says: 'The Emperor was favourably disposed 
towards the men of Augsburg. There were many merchants there who 

1 Lille, B. 2436; Augsbg. St.-A. Litteralien 1546; Thorech, pp. 40, 41, 49; v. 
Stettin, GesMshte v. Augsburg, I, 661. 

' Akten derFmherrl. yon Imhofachen u. yon Scheuerlschen Familion Archive 
in Nurembtug. Of. also v. Holler, Schwetzeruchee Mum u. Medaillen Cabinet, U, 
88; Lohner, Mumen der Republik Bern, p. 257. 

did business with Mm. If he wanted money they lent hi a large quan- 
tity on the silver and copper from Schwatz. These merchants got a lot of 
profit out of him, for he was an honourable man and kept his promises. 
So the merchants could fleece him. And if the Emperor carried on busi- 
ness in copper and silver with them, the Emperor's councillors likewise 
took part secretly under the names of merchants.' 1 

But tiiis is by no means a correct description of their relations. The 
Emperor Maximilian by no means always conducted himself so honour- 
ably towards the burghers. We find, indeed, indications of a financial 
behaviour which appear to justify the scorn with which the Italians in 
particular judged these beggarly acts of the Emperor. Indeed, the Em- 
peror was perhaps only personally responsible so far as he made a bad 
choice of his financial officials. But in reference to this it is again very 
noticeable that he preferred to make use of Augsburg and Nuremberg 
merchants to manage his finances. The most celebrated of these men of 
business were Heinrich Wolf! and his son Balthasar from Nuremberg, 
and George Gossembrot, Lucas Gassner, Hans von Stetten, George 
Ilsung, and Hans Paumgartner from Augsburg. 

How the Wolffs came to serve the Emperor deserves to be told in 
greater detail. In H94, Heinrich Wolff, who by that time 'was almost 
his good friend,' agreed to lend to the Emperor 'a goodly sum of money' 
on the silver from Schwatz. He paid this sum and obtained a written 
promise from Maximilian that for four years all the Tyrol silver that 
was to be delivered to the Mint at Hall should be handed over to him at 
a definite price. But this silver was, as we know, already mortgaged to 
the Fugger, and they naturally would not give up their security. The 
Emperor was even prevailed upon to assign the silver to them for a longer 
period. He relegated Henry Wolff to his claim against Lodovico il Moro, 
Duke of Milan, who still owed him a part of his marriage portion. But 
Wolff got nothing from him, and in order to save his outstanding debt 
allowed himself to be drawn in to lend more and more to the Emperor 
till at last the whole of his very considerable property had gone. To com- 
pensate him Maximilian appointed him to his Council and then elevated 
his son Balthasar to be royal chamberlain and head treasurer to the 
patrimonial dominions, as well as ennobling him. But this son, when he 
stood in such high favour with the Emperor, began to be ashamed of his 
father who had been ruined. This broke his father's heart. 2 

Gossembrot was the first burgher of Augsburg who entered into the 
service of Maximilian. He had already done business with Duke Sig- 

1 Of. Greiff m d. Anmerkungen zw Lucas Hems Tagdmche, p. 100, and v. Stetten, 
OencMdOe Augsburgs, I, 245 ff. 

> These details are from the ScheuerUnich of Dr. Christof SoheuerL For Bal- 
thasar Wolff of. Adler, Die Organisation der CentralverwdUung wnter Kaiser 
Maximilian, I, p. 83; Chmel, Urkunden z Geseh. Maximilians, 1, p. 180 09. 


naund of Tyrol, with the result that in 1477 he was mortgagee of the 
guardianship of Ernberg, and in the same year was appointed an unpaid 
counsellor of the Duke. When Mn.Tnmi1ia.Ti took over the government of 
Tyrol in 1490 he confirmed Gossembrot as guardian of Ernberg and 
employed him then in his many financial affairs, in which Gossenbrot 
appears on the one side as the Emperor's representative, but on the 
other as his banker. Thus in 1492 he procured for him 35,000 fl. on a tax 
granted by the province of Tyrol. In 1494 he tried to get money from 
the Fugger for the Emperor. But in 1495 he personally lent him 
29,000 fl. at his pressing request. These, however, are only particular 
examples. Doubtless he developed a much more important business 
activity. In particular, in conjunction with his brother Sigmund, he had 
a large interest in the trade with Tyrolese copper, since in 1483 1,000 
centners of copper were delivered to him as an instalment of a claim 
against Duke Sigmund. His peculiar position is perhaps best character- 
ized by the fact that in conjunction with his brother he had a large 
interest in the big syndicate which in 1498 and 1499 wished to keep up 
the price of copper in Venice. 1 

Hans von Stetten, too, was in 1491 empowered by Maximilian to get 
money by trading, exchange, and other ways, as should be necessary. 
Later, he was appointed Counsellor and Chamberlain of Lower Austria. 
In 1506 the Emperor informed him that he had served him truly for six- 
teen years, that in this time of pressing occasions, wars, etc., he had 
obtained for him or lent to him large sums of money by himself or his 
relations at least 200,000 fl. in all, which had been very useful to him, 
the Emperor, and had preserved him from harm. Further, for this he 
had never charged 'interest, compensation, or anything else,' and had re- 
ceived no pay, but into the bargain had neglected his own business and 
had used up of his own property 3,000 fl. more than was shown in the 
accounts. For this the Emperor now granted him once for all 10,000 fl., 
and mortgaged certain estates as security for the payment. 2 

All we know of Lucas Gassner is that from 1502-4 he was active as 
a financial official of Maximilian, 8 and we are not much better informed 
about Hans Paumgartner, although he played a very important part. 
Meanwhile, we will state here the little that we know of him and add a 
few details of the further fortunes of his family. 

The Pawmgartner. From early time the Nuremberg merchant Hans 
Paumgartner must have had a considerable interest in Tyrol mining, 

'For Gossembrot of. Ladumer in d. Ztschr. d. Ferdinandeums, 3, Folge, 15, 
Heft, p. 105; Chroniken d. deuischen, Stadte: Augsburg, U, 394; v. Stetten, 
Geschichte v. Augsburg, I, 246, 256; v. Beckh-Widmanstetter, Die dltere Art 
der QeUbeschaffung im Kriege, p. 19, Amn. 24. 

' von Stetten, Geschichte d. augsburger GeacUechter, pp. 413, 417. 



especially in copper mines. On this account lie lived for a considerable 
time, at any rate from 1491 to 1499, at Kuffetein, and in the years 
1498-9 with his partners, one of whom, Hans Knoll, was a conspicuous 
member of the copper syndicate. On the death of George Gossembrot in 
1502, he, together with Lucas Gassner, for some years on behalf of the 
Emperor, took care of the businesses which till then Gossembrot had 
managed and succeeded hi in the guardianship of Ernberg, which he 
held as security till 1523. But before 1511 he had akeady gone to live 
in Augsburg. 1 

His son, Hans Paumgartner the younger, married one of the Fugger 
in Augsburg, and in 1518, at the end of the Emperor Maximilian's life, 
was expressly mentioned as the man who paid money to the Hapsburgs. 
He at that time lent the Emperor 10,000 fl. In 1524, 75,000 fl. were paid 
out to Tiim for old claims against Mayimilian. In 1530 he lent the 
Emperor 42,000 fl.; it was, however, paid back after three months with 
17 per cent, per annum interest to his representative, Wolff Haller, in 
Antwerp. In 1543 he also helped King Ferdinand with 10,000 fl., and in 
November, 1544, in conjunction with the Fugger and the Haugs, lent him 
100,000 fl. on silver. In the Schmalkaldian war he remained on the side 
of the Catholics, and consequently was much hated by the Protestants. 
For a long time he was an Imperial counsellor and was ennobled in 1539. 
He was accounted among the richest merchants of his time. But serious 
misfortune quickly came on his sons. One of them, David, left Augsburg 
in 1552, became a partisan of William of Grumbach, and through his 
senseless vanity became involved in his fall and perished on the scaffold 
in 1567. He had akeady lost his fortune. His brother, John George, got 
into financial difficulties in 1565, and was for five years in a debtor's 
prison. Then he made over all his assets to his creditors, whose claims 
amounted to 104,471 fl., and went abroad. 2 

The Welser. Unfortunately we are not so well informed about the fate 
of the second largest of the German trading houses of the sixteenth 
century as is necessary, considering its all-embracing and many-sided 
importance. While the Fugger preserved their archives the Welser, after 
the fall of their business, lost theirs, and it is only recently, through the 
piety and labour of individual descendants, that the scanty remains of 
these treasures have again been collected. The information we have is, 
however, sufficient to let us recognize the fundamental difference from 
almost every point of view that existed between the two largest trading 
houses of South Germany. 

Origin. The Welsers belong to one of the oldest families of Augsburg; 

*Cf. Laduraer, ZtscJir. d. Ferdinandeum*, 3, Folge (1870), p. 107. Adler Lo. 
'Of. v. Stetten,ffeacAicAfet>. Augsburg, 1, 664, 590; v, Stetten, Gesch. d. Augn- 
bwyer GescKlechter, p. 198. 


but about their business - which for a long period, like the other burgher 
families of South Germany, they would have chiefly carried on with 
Italy -we first hear in 1473, when the brothers Bartel, Jacob, Lucas 
and Dlrich Welser together founded a trading company, whose impor- 
tance was increased through their connection with Hans Vb'hlin of Mem- 
mingen. This Hans Vohlin, who was one of the line founded in the four- 
teenth century by Vohlin von Ungerhausen, appear with his associates 
in 1490 as having a part in the Tyrol silver business. The connection of . 
the Welser with the Vohlins was doubtless already established, for 
Anton Welser, one of the sons of Lucas, had in 1479 married a daughter 
of Hans Vohlin. Lucas Welser was the ancestor of the three chief 
branches of the family named after his sons Anton, Lucas, and Jacob. 
The Lucas branch was extinct by 1628; the Jacob branch (the Nurem- 
berg main branch) became extinct in 1878; while the Anton branch still 
exists in its Ulm offshoot. 

For some time Anton Welser lived in Memmingen, where his father- 
in-law, Hans Vohlin, was burgomaster; but about 1496 he returned to 
Augsburg, and in conjunction with his brother-in-law, Conrad Vohlin, 
formed the firm of Anton Welser, Conrad Vohlin and Company, which 
quickly became of great consequence. It also at once engaged in the 
silver trade. They induced the town of Berne to have coined the un- 
popular 'Eollenbatzen.' In this apparently they enjoyed the support of 
the Emperor. 1 

Development till 1517. We have already seen many times that the 
Welser took a part in the great financial transactions due to the policy of 
the Hapsburgs. But at the same time they carried on an extensive 
trade and tried to adapt themselves to the new conditions in this depart- 
ment. That is a great difference between the basis of their business and 
that of the Fugger. While Jakob Fugger early gave up trading, Anton 
Welser founded an important factory at Lisbon, and in 1503 his agent, 
Simon Seitz, succeeded in obtaining the first privileges for the German 
merchants. The Welser then took a prominent part in the great expedi- 
tion to the East Indies, which was equipped by the German and Italian 
merchants in 1505. Their share amounted to 20,000 fl.; that of the 
Fugger, on the other hand, was only 4,000 fl.; and that of the Genoese 
and Florentines together only 29,400 fl. The enterprise produced a 
profit of 175 per cent, per annum; but in consequence of Portuguese 
chicanery it was so long before it was divided and such difficulties were 
put in the way of the Germans and Italians trading directly that to go 
on with it was not to be thought of. 2 For this reason, after this the 

'Ladurner, p. 101; Lohner, p. 259. 

' Mitth. d. Ver. f. Geachickte d. Stadt NHrnbg Heft, 1, p. 100; Heyd, Gesck. 
d. Lavtmtehandds, II, 523 ff. (new French Ed. II, 530 ft.). 


Welser carried on the highly speculative business at second-hand with 
East Indian spices from Lisbon to Antwerp and South Germany on a 
large scale. For a long time fortune smiled on them so that for the time 
being they made considerable profits. 1 

We learn from Lucas Bern, who with his brother Andreas then had a 
share in the profits, that his share amounted to: 

31 per cent, from 1502 to 1504, or 10 J per cent, per annum. 

39 1505 1507, 13 

15 1508 1510, 5 , 

11 , 1511 1512, 5f 

16 1513 1515, 5$ 
30 1516 1516, 15 , 

We also hear that the result of the business chiefly depended on the 
state of the business with Portugal. For the whole period of sixteen 
years there was an average annual profit of 9 per cent., which is quite 
respectable, but cannot be compared with the profits of the Fugger, who, 
as we have seen, earned an average annual profit of 54 per cent. 

Certainly it may be that at times the profits of the Welser were higher 
than appears from the accounts and dividends, and here again we come 
upon a great difference between the Fugger and the Welser. 

The business house of the Fugger never had more than a few persons 
interested except near relations, and since the death of the brothers of 
Jakob Fugger the management was always in one hand. The factories 
therefore must, as a rule, have been managed by carefully chosen paid 
assistants who did not belong to the family. The house of the Welser, on 
the other hand, had a large number of persons interested, part of whom 
either did not belong to the family or were only distant relations. They 
worked at the factories, but at the same time they were entitled to a 
share in the profits. So they did their best to carry on the business well. 
But the whole system led repeatedly to great disputes as to the way in 
which the business should be carried on and the profits reckoned, so that 
in 1517 part of the company left believing that they had been cheated 
by the others. 2 

The articles of partnership of 1508 contain no less than eighteen 
names, and in the course of the next year some others must have joined 
the firm: Anton Welser the elder, Conrad Vohlin, Ludwig Reyhing, Wolf 
Pfister, Jacob Welser, Marx Pfister, Hans Pfister, Conrad Imhof , Anton 
Lauginger, Peter Heintzel, Hans Lauginger, Narciss Lauginger, Ulrich 
Hanold, Simon Seitz, Hans Heintzel, Wilhelm Heintzel, Andreas Bern, 
and Bartholomew Welser. Lucas Bern is not mentioned, but no doubt 
he had an interest in the business. 

1 Tagebwsh d. Lucas Bern, edit. v. Greiff, p. 30. 
8 Lucas Bom (Lap. 19). 


In 1517 Jacob Welser, Ulrica Hanold and Andreas and Lucas Bern 
retired from the business; possibly some others did, too, whom the 
Welser wanted to get rid of. Jacob Welser founded a new firm in 

About the development of the Welser business before this great alter- 
ation it may be added that in 1507 the Welser were mentioned in Ant- 
werp; yet it was only in 1509 that they bought there a large house which 
had just been built, called 'De Gulden Boose,' near the cathedral, where 
the head post office is now. 1 Lucas Bern repeatedly acted as agent of the 
firm at Antwerp at that time; in 1521 Gabriel Studelin is mentioned as 
agent, and in 1525-30 Alexius Grimel, whom we shall come across again 

At this time, besides those in Antwerp and Lisbon, the Welser had 
well-established factories in Nuremberg, Danzig, Venice, Milan, Borne, 
Genoa, Freiburg, Berne, Zurich, Lyons, Saragossa, and possibly in other 
places, which were regularly visited by individual members of the firm 
in order to inspect the factories. In 1512 the Welser gave up the ship- 
ping trade and closed down the factory at Danzig. 

A new period in the development of the house begins with Jacob 
Welser leaving the firm in 1517, and the death of Anton Welser which 
followed in the next year. After this there was an increasing amount of 
purely financial business, without, however, displacing the trading in 
goods and the other undertakings. The Welser remained the second 
largest business house, though their capital, which never approached 
that of the Fugger, was considerably weakened by the division in 1517. 

The Nuremberg Welser. Anton's brother, Jacob Welser, in 1493 was 
managing the Nuremberg branch of the house, but also from time to time 
was in partnership with Conrad Imhof , and when his father-in-law, Hans 
Thumer, died in 1500 carried on this business till 1502. In one of the lists 
of Nuremberg merchants attributed to the year 1511, it is said of him, 
'He carries on a large trade in all countries such as no merchant of 
Nuremberg has ever done.' But the real direction of the business was 
then concentrated in Augsburg. In 1517, Jacob left the firm and founded 
his own business in Nuremberg. He took in as partners his sons Hans, 
Jacob and Sebastian, and Hieronymus Futterer; and later on, from time 
to time, Hans Eutterer and Wolff Harstorfer as well; but the firm was 
never particularly large. The capital amounted to 66,000 fl. in 1527; 
92,000 fl. from 1529 to 1535; 243,000 fl. in 1543; but so much was taken 
out by the partners that only 86,400 fl. remained in the business. In the 
following two years this increased again to 281,000 fl. 8 

1 Thys, Bulletin de la Prapriete, 1890, p. 8. 

* Register der RattoMeg in unsser Versamlung (FreiherrL yon Welsersches 
Familien-Archiv in Schloas Neunhof ). 


The Welser of Nuremberg had factories in Genoa, Venice, Aquila (in 
South Italy, for buying saffron), Milan, Antwerp, Lyons, Vienna, and 
Schlackenwald in Bohemia; in the last-named pkce in order to carry on 
their participation in the mines there. In 1516, not far from the tin and 
silver mines of Schlackenwald, there was discovered new rich silver 
deposits, and with the help of the Counts Schlich, who owned the land, 
the flourishing town of Joachimsthal soon grew up. The Counts made 
use of an old privilege and began at once to strike coins there. The first 
genuine thalers, which at first were called 'Joachimsthaler,' came from 
the mint there. The Welser of Nuremberg, in conjunction with Hans 
Nutzel, lent the Counts a great deal of money, and also took a part in the 
mining at Schlackenwald, which they extended. 1 

The main business of the Welser of Nuremberg was pure trade, but 
this did not debar them at times from carrying out very important 
financial transactions; their operations at first, however, were on a very 
solid basis corresponding to the ruling business principles in Nuremberg. 
Thus, in the resolutions of the partnership in 1529, it is stated: 'Agreed 
that^in Antwerp or the Netherlands no credit over 25,000 ft. shall be 
given, and when such a claim falls due and the debtor wishes the ad- 
vance continued the interest shall be got in; no interest shall be allowed 
to run on interest; also no bonds of the Receivers General shall be taken; 
but it shall always be required that the ruler of the land shall enter into 
a written engagement jointly and severally, and finally promissory 
notes shall not be accepted unless they are acknowledged by the 
drawers.' Further, in 1545, it was decided not to lend the King of 
France more than 24,000 crowns. 

These were wise principles, but unfortunately they were soon aban- 
doned. By the end of 1546 we find Jacob and Sebastian Welser taking 
part to the extent of almost 100,000 ducats in no less than six great 
loans, which the Fugger had granted to the Emperor against bills on 
Spain. But it was much more dangerous that they decided in 1551 'to 
venture 100,000 fl. on short term loans in the market and bonds of the 
Receivers General. ' Such a spirit of enterprise in critical times could not 
fail to result in great losses, and so, since this time, the welfare of the 
Welser of Nuremberg soon went downhill. 

Of the sons of the founder of the Nuremberg firm, Jacob the younger 
managed the Antwerp factory since 1530, Hans the Augsburg branch, 
which soon became more important than the main business. In his 
father's lifetime Hans already seems to have been the soul of the busi- 
ness, for in 1531 his brother Jacob, who is expressly described as Hans' 
agent, was paid 19,800 livres, whose value Hans Welser in Augsburg 
had in 1530 handed over against bills of exchange of the Emperor. The 
1 Scheuerl Buch and Sterabeig, Qeaehichte d. Bohm. Bergwerlte, p. 322. 


fixm was changed to Hans Welsei and Brothers before 1537, although 
their father, Jacob, did not die till 1541. 

Hans Welser attained to great consequence in Augsburg, and even 
became Burgomaster. Contrary to his cousins in Augsburg, he was a 
Protestant, but a moderate one, and did not wish to know anything of 
the war against the Emperor. He died in 1559, five years after bis 
brother Jacob. The third brother, Sebastian, remained in Nuremberg 
and carried on the business after the death of his brothers till he gave up 
the ghost in 1566. His sons, Jacob and Hans, then gave up trade which 
no longer paid. At the time of their father's death their claims on the 
French Court amounted to 55,245 livres Tournois. So much for the 
Welser of Nuremberg. 1 

The Augsburg Welser under Bartholomew. Of the other sons of Anton 
Welser, Bartholomew, after his father's death, took over the manage- 
ment of the head business at Augsburg, while Franz deserves mention as 
the father of Philippine Welser. Bartholomew Welser is especially cele- 
brated for his attempt at colonization in Venezuela which, however, 
regarded - as it rightly should be judged - as a business enterprise, does 
not deserve the praise lavished on him for it. It was an adventure on the 
Spanish model. Begun without serious intentions of business profit, and 
in spite of the system of exploitation equally on the Spanish pattern, yet 
in essentials only by warlike means carried through as a genuine 'Con- 
quista,' it was finally wrecked for want of sufficient power as well as by 
the hostile disposition of the Spaniards. Yet the Welser expedition to 
Venezuela will always remain memorable as the first and only attempt 
of the Germans in America - even though under a foreign monarch, for 
Charles V ruled there as King of Spain, not as Emperor - to acquire such 

By the end of Anton Welser's life the business had acquired a some- 
what new character by the large participation in the loans for the elec- 
tion of Charles V as Emperor. We must refer to the previous chapter for 
the details of this big affair. It was concluded in Anton Welser's life- 
time; but as he died soon after it fell to his son to carry it out. With 
it the Welser stepped into the first rank of the great financiers. Again 
the Emperor at the Diet of Worms received from them a considerable 
loan, and in the same year they also took a prominent part in the great 
sales of the Neapolitan domains. 

Of the following decade, apart from the Venezuela enterprise which 
began in 1527, we only know that during the years 1525-8 the Welaer, 

1 Lille, B. 2363. Hecker in der Ztschr. d. histor. ver. /. Schwdben, I, 52. 

The latest description of the Weber enterprise in Venezuela is Schumacher in 
the Festschrift z. Erinnerung an die Entdeckung Amerikas, 3d. H (Hamburg, 
1892). Habler has, however, discovered some n 


with Hans Ebnei in Nuremberg, earned on a large trade in copper, 
which is described as monopolistic, and that with the Fugger they par- 
ticipated largely in the great loans which the Hapsburg brothers had to 
take up in 1530; but of the details of this participation we know just as 
little as of that of the Fugger. 

Now came the time when the Welser, too, thought it necessary to give 
anew splendour to their old burgher patriciate; in 1532 the Emperor 
ennobled the brothers Bartholomew, Anton and Franz Welser two 
years after the same elevation in rank had happened to the Fugger. 
These Augsburg Welser remained Catholic; they did not, however, keep 
so unwaveringly true to the house of Hapsburg as the Fugger did. 
During the agitations preceding the election of Charles V their attitude 
had been vacillating, and once they even wished to draw back alto- 
gether. In contrast with the Fugger they had in Lyons a factory which 
was very important for them, and their interests there compelled them 
to a see-saw policy between the two parties into which Europe was then 
politically separated. Their attitude towards the religious conflicts was 

In 1527 their agent at Rome was thrown into prison because he would 
not lend the Pope 1,000 ducats. In 1532 there were mutterings in Lyons 
that the Welser had taken a part in the exchange business by means of 
which, it was said, the Bong of France would support the Evangelicals; 
and in 1534 they begged the Emperor to take back the money he had 
deposited with them, presumably to use it against the Protestants in 
case of need; for the Welser were frightened of being involved in the 
religious conflict. 1 It is consistent with this ambiguous behaviour that 
Bartholomew Welser, on the 6th April, 1541, obtained for himself, his 
children, his partners and the employees in his business an express letter 
of protection. The Fugger had never considered such a thing necessary. 

During the whole period the Welser were, it is true, repeatedly men- 
tioned in connection with large financial transactions of the Emperor 
but never without the Fugger, so there is no need for us here to repeat 
the details of these transactions. On the other hand, it is important that 
the Welser participated with 50,000 livres in a loan which the King of 
France, after the outbreak of the fourth war with the Emperor in 1542, 
took up in Lyons; certainly they were half compelled to do this, and 
they had nevertheless to pay for it later. 

Here we may allude to the correspondence in 1542-5 between Hier- 
onymus Seiler (Bartholomew's son-in-law, who earlier had represented 
the firm in Spain, but had gone out of it) and Alexius Grimel, formerly 
the Welser's agent in Antwerp. It appears from this correspondence, 
which will repeatedly occupy us, that even then the Welser in monetary 
Gayangos, Calendar III, 2, 76. Lanz, Correspmdem, H, 121, 169. 


matters did not always make towards their own relatives the advances 
that these hoped for. Seiler observes 'they wanted to have too much. 9 

The Time of the SchmalkaUvm War. During the Schmalkaldian war 
we see that in their business practice the Welser strove more and more 
to be neutral, which is an essential difference between them and the 
Fugger. 1 In the previous chapter we have already seen that at the 
beginning of this war the Welser probably participated in the exchange 
transactions concluded for the Emperor by the Court of Brussels. But 
the Emperor also wanted a large sum of cash in South Germany at once. 
The Fugger were ready to help him there too, but the Welser, on the 
other hand, decidedly refused, although, as the Emperor knew, they had 
a large sum to receive at the next Antwerp fair. The Emperor was 
bitterly offended at this refusal, and the Welser had to pay heavily for 
it later. 

In order to remain neutral as far as possible in the whole conflict, 
Bartholomew Welser, on 13th June, 1546, asked for permission from the 
Augsburg Council to be allowed to remain away from the town for three 
years. Permission was given, on which he betook himself to Arbon, on 
the Lake of Constance, where apparently he remained until the end of 
the war. In fact, the Welser do not appear to have lent any more money 
to either party. This reserve doubtless was mostly due to the conviction 
that the house was already more than sufficiently engaged in relation 
to its strength. In particular, the large capital which remained in Spain 
and could not be withdrawn, and the unluckly enterprise in Venezuela, 
caused Bartholomew Welser much anxiety. He therefore, in February, 
1547, sent his nephew Christopher Peutinger to the head-quarters of the 
Emperor to beg for an order to pay on account of the outstanding claims 
of the Welser in Spain. 

But the Emperor, who then was already Lord of South Germany, 
wanted to punish the Welser for their former refusal to help him. By 
this time Charles' tendency to despotism, which till then had been held 
back from political considerations, had broken out. Bartholomew Wel- 
ser was quite right when he sorrowfully said 'that the evening is no 
longer just.' We have a picture by Titian of the Emperor dated shortly 
before the Sf.TiTnfl.11ra.Mian war; he sits in an arm-chair, bent, oppressed 
by gout, with his forehead full of wrinkles and an angry, piercing look in 
his eyes. That was what 'the evening' looked like. Yet his counsellors 
were more to blame than he was for the arbitrary proceedings which 
now began both in the politics and in the financial methods of the 

1 The basis of the following are the business letters of the Welser written by 
Christof Peutinger from the Emperor's head-quarters at Ulm. These are in the 
Augsburg Stadtbibliothek, Peutin^nana, voL I. 


In finance, in addition to the influence of the son of Granvella, Bishop 
of Arras, that of the Imperial secretary, Francisco Erasso, was disas- 
trous. We will later give an account in its place of the mysterious 
activity of this man, whom we have already met in the previous chapter. 
Here we only repeat the observations that Christopher Peutinger made 
about him. 

When Peutinger came to Erasso to make representations about the 
payment of the older Spanish loans, he was informed that the Emperor 
must again have money, and that he would give Netherlands bonds 
of the Receivers General for it. As we have already seen, people then 
did not like to take this kind of security, because they were only a 
personal obligation on the Receivers General to pay. So Peutinger did 
not agree, and when Erasso observed that the charges on Spanish 
revenues could be given and Peutinger asked 'on which?' the Spaniard 
answered 'Sobre qualquiera cosa.' From this and other expressions of 
Erasso, Peutinger perceived that he 'was up to some bad tricks.' When 
Peutinger represented to him that formerly the Welser had been given 
good securities and had been well treated, Erasso answered, 'Time 
changes things'; the Welser had made a lot of money out of the Em- 
peror, now they must lend him at least 100,000 ducats. Peutinger be- 
came quite 'confused and sorrowful' at this, and observed that Erasso 
had the Emperor on his side and access to him at all times, while every- 
thing that he, Peutinger, said vanished like foam, however well it may 
have been justified. He thought that Erasso's expression, 'El tiempo 
muda las cosas,' had somewhat the same meaning as what Granvella was 
reported to have said, 'There is a time to promise and a time to keep 
one's promise.' The chief aim of the Emperor's Spanish Council, and of 
Erasso in particular, was to prevent the Emperor making use of Spanish 
income in the German war. This is why the saying now ran, 'Eat bird 
or die.' Peutinger's impression was strengthened when he talked with 
the Bishop of Arras, who said 'even more shocking things' to him. 

First of all the Bishop reproached the Welser that they had left the 
Emperor in the lurch in his need at Regensburg. Peutinger answered 
that at that time the firm did not know themselves what would happen 
to them and their property. They had much money to demand from the 
King of Portugal's agent in Antwerp and from the Court of the Nether- 
lands, but they could not get any. This was why it had not been possible 
to serve the Emperor except in Spain against repayment outside of 
Spain. But this had not suited the Emperor. 

Then the Bishop explained that the Emperor knew that the King of 
France had raised large loans in Lyons in which the Welser had partici- 
pated with at least 40,000 crowns, and under another name with yet 
more. Peutinger replied that this was not correct. The Welser had only 


once been compelled to lend the King 12,000 crowns in order to be 
allowed to go on carrying on business in Lyons, which was necessary for 
them in order to be able to serve the Emperor further; they had not 
done it to get a profit. We must interpose here that this was not strictly 
accurate. From tie Seiler correspondence we know that the Welser, 
under Seller's name, took part in the large arbitrage transactions of the 
Florentine Ducci in Antwerp with Lyons and served the financial needs 
of the French Court. But from the Tucher business correspondence, to 
which we shall return later, we see that also in 1545 they wished to 
participate directly in the great loan at Lyons. At that time there was 
no talk of any compulsion being used, but somewhat later it appears 
that pressure certainly seems to have been employed to make the 
German merchants in Lyons more accommodating towards the 
financial needs of the French Court. 

Thirdly, the Bishop of Arras blamed the Welser for having repaid 
claims and paid interest to the German opponents of the Emperor, 
although he had expressly, forbidden this. The excuse that the Welser 
had not known of this prohibition would not do. It was a 'cosa publica,' 
and the Emperor had nothing to do with the Welser blinding themselves. 
Peutinger explained that no repayments worth mentioning had been 
made, but that it was necessary to pay interest to keep up the credit of 
the house. Moreover, the Fugger had paid interest to the Emperor's 
opponents. To this the Bishop replied that this had been done only 
with the express permission of the Emperor; the Fugger had behaved 
well and not abandoned the Emperor in his great straits. 'This Bishop,' 
bemoans Peutinger, 'is more disastrous for us than his father, resolute as 
the devil; and they now mean to hold us tight.' 

It did no good that Peutinger begged with tears that the Welser 
should not be ruined. The Emperor treated him in a kindly way, but 
referred him again to Erasso; and after he had bribed both him and the 
Duke of Alba handsomely, he had to be thoroughly satisfied that they 
were content with a loan of 100,000 fl. on the Emperor's mere note of 
hand, without any particular income being allocated for repayment. 

The arrangement which the Welser then made to get this money, the 
way in which everywhere they collected small sums, how anxiously they 
calculated the unfavourable course of exchange, shows clearly, especi- 
ally if we compare the large scale arrangements of the Fugger, how tight 
and difficult the financial position of the second largest German trading 
house had become at bottom. The whole conduct of the Welser at this 
period further shows that they were no match for the Fugger in political 
insight and mercantile acuteness. Tet Bartholomew Welser must be 
described as a man of business acumen. But its kind was a different one 
and not so suitable as that of the Fugger for the practical management 

of a business house of the first rank. This can be seen from the letter in 
which Bartholomew Welser renders the impression which the Emperor's 
conduct made on him. 

If the Emperor's counsellors, he writes, reproach us that we are 
'inutiles en tiempo de necesidad,' they should reflect how thoughtless it 
was to begin a war without having supplied themselves with money and 
troops, with the result that almost 'they and all of us together had gone 
to destruction.' 'It is easy for Erasso and his people to succeed in cut- 
ting straps out of other people's skin!' And what will be the result of 
the present procedure? The 'hotheads' will bring everything to ruin; the 
Emperor will soon be aware of the harm done. Already now we see that 
in the Netherlands, where the Regent, through her financial agent 
Ducci, will compel the merchants according to her will. The merchants 
who must arrange their affairs in the most orderly way cannot endure 
that longer than they must. Already much money was taken from the 
Court of the Netherlands and sent to the French: 'in time perhaps things 
will be yet more disastrous there'; in fact, woZite confidere in printipibus. 
Some day credit will not be forced: 'for who will trust him in such large 
sums to another and particularly to such a powerful lord as the Em- 
peror, a lord with whom he cannot deal by question and answer; he will 
only do it of goodwill and no longer on compulsion, cost hi what it 
will.' If the Emperor does not consider this it will come to such a point 
that in all his kingdoms he will no longer have any more money or credit. 

Bartholomew Welser gave formal orders to his Spanish agent 'in 
these times' to go into no new lending business, however high the profit 
may be, and though by this the profits of the business are much dimin- 
ished, and also not to spend so much on bribes and other expenses, and 
generally slowly and carefully to reduce the whole business, but before 
all to make use of every opportunity of remitting money to Germany. 

This was just the same resolution as that at which the Fugger also 
arrived somewhat Liter. The Welser too failed to carry it out. Anton 
Fugger, thanks to the favour he had won of the Emperor by his true 
services and, further, thanks to his own skilful management, succeeded 
in a short time in drawing out of the business at least considerable 
sums and bringing them into safety before new demands came on him. 
The Welser did not succeed in doing this. 

The Later Period till the Crisis of 1557. In 1549 we again find Bartho- 
lomew Welser's Company taking part in loans which the Court of 
Brussels had raised on the Antwerp Bourse. Paul Behaim, who then 
went to Antwerp as the Imhof's agent, was instructed to implore the 
Welser's agent there as far as possible to prolong the participation 
which the Imhof had in that loan under the name of the Welser. In 
this year the Welser sent to Antwerp a new agent, Conrad Bayr, who 


formerly had been in the service of the Imhof. As soon as he came to 
Antwerp he informed Paul Behaim 'he had entirely turned round; he 
associated on the Bourse with no Germans except the Schetze (who 
were treated as Germans), Lazarus Tucher, Jacob Welser and Oertel 
(the Fugger agent), in short - very grave and important.' The persons 
mentioned were the heads or representatives of the the most prominent 
business houses, to which class the Welser still uncontestedly belonged. 
A Venetian Ambassador, reporting from Germany in 1548, names the 
Augsburg Welser with the Paumgartner as the richest German trading 
company after the Fugger. 1 

Bartholomew Welser participated with 70,000 Netherlands Carolua 
gulden in the loan which the Emperor took up in Augsburg in April, 
1551. But, like the Fugger, did not pay ready money, but only gave 
promissory notes of his firm, which then were discounted at 11 per cent, 
per annum in Antwerp by Wolff Haller von Hallerstein. 2 

Soon after Bartholomew Welser retired from business, but he lived 
on till 1561. His sons Christopher, Leonard, and Hans, with his nephews 
Matthew and Marx Welser and Bartholomew May, carried on the busi- 
ness under the style of Christopher Welser and Brothers, which later 
was changed to Christopher Welser and Company. In June, 1552, we 
find this firm in Antwerp taking part in large loans which were taken up 
to send a fleet to Spain to fetch American silver. The city of Antwerp 
took charge of the loan in the interest of the merchants, who were in 
pressing need of silver. The Welser participated with 81,085 Caroms 
gulden, for two fairs (a half-year) against interest at 6| per cent, pro rota 
temporis. 3 

We have now arrived at the third generation which had to conduct 
the business of the Welser since it had grown to be of European impor- 
tance. It proved to be just as critical for the wealth of the family as we 
have seen in the case of the Fugger. In Antwerp, as in Spain and Lyons, 
the Welser allowed themselves to be drawn on to new risky financial 
business, and when the frightful financial crisis of 1557 overtook them 
their shares were: 


1. Unpaid Claims on the French Court 39,215 

2. Netherlands Bonds of the Receivers General 20,523 

3. Spanish Loans 122,461 

Total 182.199 
of which nothing was to be got. 4 ; 

1 Panl Behaim'a (I) Correspondence in the Oermanisches Museum and Fmtes 
Serum Avxtr. Abth. II, Bd. XXX, p. 71. 

Departemental-Archiv. in Lille (Chambre dee Comptes, B. 2493). 

1 Briisseler Staatsarchiv (Chambre des Comptea, No. 23470). 

< Wete- Archives at Schloss Neunhof. 


It is less dangerous, but characteristic of the enterprising spirit of the 
Welser that in the great loan which the town of Nuremberg had to take 
up through the Fugger in 1554 to carry on the war with the Margrave, 
they participated with 60,000 fl. (the whole amount was 110,000 fl.). In 
this their Antwerp agent, Conrad Bayr, played the chief part, just as the 
Antwerp agent of the Fugger at that time had perhaps more influence 
on the management of the business than Anton Fugger himself. 1 

After the state bankruptcy of 1557, the Welser received for their 
claims on the Spanish Crown 5 per cent. Spanish Rentes (juros), on 
which they must in any case have lost 40-50 per cent. In settling their 
claims they showed so little business ability that the remarkably effi- 
cient Spanish agent of the Fugger, in reporting home about it, critically 
shook his head. 8 

The claims on the French Court and the Netherlands bonds of the 
Receivers General remained for the most part unpaid. 

Decline and Final Catastrophe. In the period that follows we have not 
sufficient information about the business activities of the Welser to be 
able to obtain a just picture of the increasingly rapid decline of the 
house. There is little point in repeating here the separate pieces of in- 
formation of which we can get possession. 

In the hard times of 1562, when the South German business houses 
suffered their first shock, the credit of the Welser remained at first un- 
shaken; it was even for a time better than that of the Fugger. In 156ti, 
when the Fugger and most of the other South German houses had 
enough to do to keep up their credit, the Welser could help the English 
Crown with a very welcome loan. Gresham writes from Antwerp: 'For 
these Welsers I could never get in, untill now; which be men of great 
name and fame throughout all Christendom, and through the death of 
his old factor (which was a dog and a ranke papist), and his factor, being 
nowe, is one that I have dealt muche in times past for myne own affairs, 
when I did occupie merchandise being in Spain xii yeres past, who 
hathe persuaded his masters to enter.' 8 

Yet with the progress of the confusion in the Netherlands and the 
general credit crisis the credit of the Welser, too, must have quickly 
declined in proportion. Their Antwerp property was sold in 1580. 
About this time Christopher and Hans appear to have completely re- 
tired from the business. Leonard had already died in 1557 and Matthew 
in 1578. Christopher's son of the same name founded the Ulm line of 
the house, the only one which still exists. 

The conduct of the business then passed to Marcus Welser, who took 

Imhof and Welser Family Archives. 

Fugger Archives, 2, 5, 12. Letter from Valladolid of 23rd April, 1568. 

Burgon, Life and Times of TAomat Graham, H, 166. 


into partnership Ms nephew Matthew (son of the Matthew who died in 
1578), and the business had the firm name of Marx and Matthew Welser 
and Company. It was by then already so weakened that it got into 
serious difficulties in 1587, and would like to have dissolved in 1590 if 
this could have been done in face of the difficulty of getting in the large 
Spanish and other outstanding debts. So the business was carried on 
farther. Other attempts were made at oversea trading on a grand scale. 
These are very interesting in themselves, but cannot be followed out 
further here. 1 

After the death of Marcus Welser in 1596 Matthew carried on the 
business for another eighteen years in conjunction with his brothers, 
Marcus and Paul. In 1603 he became Imperial Treasurer (Keichspfen- 
nigmeister), but after three years had to give up this position and, as a 
result of his administration, remained a creditor of the Emperor for 
considerable sums - a fact which will have hastened the downfall of the 
house. Paul became Burgomaster of Augsburg. Marcus became a well- 
known polyhistorian, Chamberlain to the Treasury of the town of Augs- 
burg and Imperial Counsellor. He died in 1614, and on the day after 
his death his brother was declared bankrupt. 'If Marcus Welser had 
remained alive,' says an Augsburg chronicler, 2 'the dreadful, terrible 
bankruptcy would not yet have been made public, which has caused 
great harm to the whole town.' 

There are many statements of the assets and liabilities of the house 
at the time of its collapse. They differ among themselves, but allow the 
hopeless position to be clearly seen. 

The Welser themselves stated that their assets amounted to 
372,000 fl. 


Of this amount claims on the Emperor were 181,000 

On the Elector of Mainz 39,040 

On the States of Brabant (in arrears since 1576) 30,000 

Landed property is given as 46,600 

But according to an expert valuation not more than 55,600 fl. out of 
this 372,000 fl. was unquestionably good. All the rest was doubtful or 
quite worthless. The liabilities, according to one compilation, amounted 
to 586,575 fl.; to another, 509,992 fl. Among these are: 

The Fugger 131,000 fl. 

According to another probably more correct statement, 74,666 fl. 

'Dobel, Pepper Trade of the Fugger and Weber, 1586-91 in Zttchr. d. hist. 
Ver. f. Schwaben, SHI, 125 ff. 

Stadtbibliothek, Chrnnik der Jakre 1546-1617 (Augustana No. 


The rest are sums under 100,000 fl., mostly belonging to relations and 
friends of the house. In the days just before the bankruptcy the Welser 
had taken up money which increased the general bitterness against 
them. At the suit of Hannibal, the chief creditor, both the surviving 
brothers were imprisoned and finally set in irons. They offered, if they 
were set free, to make over to their creditors all their assets and deal 
with them as directed, and also to make over to their creditors all 
property they might acquire later. The creditors, however, regarded 
this offer only as an attempt to deceive. 

Paul Welser died in 1620, probably still in prison. Marcus spent his 
last days in complete poverty, so that he had to be supported out of the 
family trust. He died at the age of eighty in 1633. 

Thus the world-wide business of the Welser came to an inglorious end. 
They had never, like the Pugger, influenced the course of history by 
their financial transactions. Their chief importance lies in their repeated 
attempts to secure for themselves, as South German merchants, a share 
in the trade of the world, even after the great discoveries. These at- 
tempts will always remain memorable. 

The Hochstetter. In the first decade of the sixteenth century the Hoch- 
stetter was the most important business house in Augsburg after the 
Fugger and Welser. Ambrosius Hochstetter was the soul of the busi- 
ness. He carried it on with his brothers Hans and George and some 
other partners, and later on took his sons Ambrosius and Joachim into 
partnership. The firm changed from time to time. The Hochstetter 
were among the first South Germans to set up a branch in Antwerp. In 
1486 they bought a large piece of land in the Kipdorp Strasse, which 
they built upon and rounded off. This was divided up after the collapse 
of the house, and a street was made through it which still bears the 
name 'Hochstetter Strasse.' 1 

In 1489-so the Augsburger chronicler Clemens Sander relates - 
Ambrosius Hochstetter visited the Archduke Maximilian, who was held 
in prison by the burghers of Bruges, provided him with the means of 
subsistence, and also lent him money which enabled him to appease the 
men of Bruges. This story is not improbable, for the Hochstetter, even 
at the time of their fall, enjoyed the quite special favour of the house of 
Austria, and Clemens Sander was apparently informed of their relations. 

The chief business of the firm was concentrated in Antwerp, where as 
a rule a member of the family lived. In 1505 they participated with 
4,000 fl. in the great expedition of the South German and Italian mer- 
chants to the East Indies; and since then carried on an extensive trade at 
second-hand in spices between Lisbon and Antwerp. The Hochstetter 
were the most hated monopolists of their time. They acquired, it was 

Thys, Histor, deatraten, en openbare ptaataen van Antteerpen.WL 1893, p. 272. 


said, their capital in small sums as deposits, and employed it to control 
the market of individual commodities. Clemens Sander informs us: 
'Princes, Counts, nobles, burghers, farmers, serving-men and women 
have deposited ike money they had with Ambrosius Hochstetter, and 
he has paid them 5 per cent. Many farmers' boys, who had not more 
than 10 gulden, have given it to him in his business, and thought it was 
in good hands. For a time he must have paid interest on a million 
gulden. But it was common talk that he lied freely. No one has'known 
that he paid interest on so much. He was a good Christian and entirely 
against the Lutherans. But in his business he has often oppressed the 
poor man, not only in the large articles of the world market, but also in 
small wares. Thus he bought up ash wood when the roads were good and 
brought it to market when the roads had become bad. He did the same 
with wine and corn. He has often bought up the whole stock of one com- 
modity at more than it was worth, so that he could squeeze at his 
pleasure the other merchants who could not do this. Then he has raised 
the price of goods in all lands and sold them at his pleasure.' 

His own partners, too, made heavy complaints against Ambrosius 
Hochstetter. In 1517, the year in which the great trading business of 
the Welser split up on account of similar disputes, Bartholomew Bern, a 
partner in the Hochstetter Company, complained to the town bailiff of 
Augsburg and then, as he did not give him justice, to the Emperor and the 
Empire that the Hochstetter had fraudulent balance sheets. Eem had 
only 900 fl. in the business. He claimed 30,000 fl. as the profit on this 
for six years, while the Hochstetters would only pay out 26,000 fl. to 
him. If these figures are correct, the firm during the six years had made 
an average annual profit of 500-600 per cent., which is quite incredible. 
But in any case the suit was a perfect godsend, for the public opinion, 
which was embittered against the large companies apart from that, and 
particularly for the nobility who powerfully supported the discontented 
Bern. Finally there was an arbitration, presided over by Jakob Fugger, 
which awarded him part of his claim. Yet he considered his claim just, 
wished to take the law into his own hands and pay himself out of the 
Hochstetter's goods. For this he was put in prison, where he died. This 
is Clemens Sander's account. 

The Hochstetter speculated far beyond their resources. As it after- 
wards appeared, their own capital was by no means very large, which 
again tells against the enormous figures for profits. For even if, as was 
said, the business had lost a ship and other goods had been stolen in 
transit by street robbers, and if in addition the sons and son-in-law of 
Ambrosius Hochstetter were gamblers and wasters, yet after such fabu- 
lous profits the capital could not possibly have been so much diminished 
. by these means as it is stated to be in 1528. 


In the years 1511-17 the Hochstetter obtained a considerable part of 
the output of the Tyrolese silver and copper. But the business with 
which the firm chiefly occupied itself in the last years of its existence 
was a large speculation in quicksilver. They had bought up some for 
200,000 fl. and thought they could control the market, when new rich 
deposits were discovered in Spain and Hungary. In vain they tried to 
get hold of these. The speculation failed and the Hochstetter lost a 
third of the price they had paid. 1 

Yet, in September, 1526, an agent of the English Crown in Antwerp 
says that the Hochstetter are as rich and capable of performing their 
undertakings as the Welser, on which the payment of the English sub- 
sidies to the hard-pressed King of Hungary was transferred to them.* 
Yet some months later in merchants' letters, written from South Ger- 
many to Antwerp, there appear mysterious hints that the credit of the 
house no longer appears to be secure. It appears now that the Hoch- 
stetter plunged into a whirlpool of new business to escape the threatened 
destruction. In April, 1527, Joachim Hochstetter, one of the sons of old 
Ambrosius, obtained from the English Government permission for ten 
years to import goods into and export goods from England. Hitherto no 
South German merchant had ever done this. As immediately after 
there was a great rise of prices in England he imported a considerable 
quantity of wheat. In doing so he came into business relations with 
Richard Gresham, a highly respected member of this celebrated mer- 
chant family. 

In March, 1528, Eichard Gresham recommended him to Wolsey, as 
one of the richest merchants in the Netherlands and having much in- 
fluence both at the Court of Brussels and in Germany. Hochstetter had 
been very helpful to Gresham and other Englishmen when they had been 
imprisoned in the Netherlands. But soon he himself needed their help. 
Just then there were five or six ships loaded with grain for the Hoch- 
stetter to be sent to England. Differences arose. The corn was seized in 
Holland, and the Hochstetter, who had sold it to Eichard and John 
Gresham for delivery against English cloth, could not fulfil their con- 
tract. In July, 1528, Joachim Hochstetter himself travelled to England, 
where he had often been before. There he accused the Greshams, saying 
that during his last journey to England they had scorned him as bankrupt 
in the Netherlands and done him harm in every way, so that the credit 
of his house had been shaken in all Europe and he would be compelled 
to sell a quantity of quicksilver under value only to obtain ready money 
to pay his creditors. He demanded compensation from the Greshams 

1 Here again our principal authority is Clemens Sander. Of. Gayangos, Calen- 
dar HI, 2, 337, for the Spanish quicksilver mines. 
' Brewer, Calendar IV, No. 2485, and 2662. 


for the damage he had suffered. 1 Soon the house was completely 

In August, 1528, the Hochstetter concluded the following transaction 
with the Court of Brussels. 8 The Imperial troops in Guelden had then to 
be paid at once, or they would scatter. The Hochstetter declared them- 
selves ready to lend 200,000 Garolus gulden to the Court of Brussels. 
They handed over no cash, but 350,700 pounds of quicksilver and 60,760 
pounds of cinnabar, which the Government on their side had to sell. 
The sale was entrusted to Lazarus Tucher, a Nuremberger who had 
settled in Antwerp, who already had carried on big transactions, especi- 
ally in pepper, for the Hochstetter, the Welser and Manlich, and at that 
time was the chief agent for South German speculation in Antwerp. 

Lazarus Tucher explained to the Government that he had only been 
able to get 126,000 Carolus gulden instead of 200,000 for the quicksilver 
and cinnabar; also these articles were not saleable; and since he had not 
been able to find buyers for the whole parcel, he, too, could not pay the 
126,000 Carolus gulden in ready money, but only in instalments extend- 
ing over many months. So the Government lost 74,000 Carolus gulden, 
which appeared very excessive to the chief Receiver General of the 
Netherlands, but was agreed to by the Emperor in view of his pressing 
need for money. Through this transaction Lazarus Tucher came into 
continued business relations with the Government of the Netherlands. 
That Antwerp agent of the Tucher of Nuremberg, but who had no busi- 
ness relations with Lazarus, reports of him in November, 1528: 'Since 
the Hochstetter have got into bad repute he does not talk so loud and is 
almost bankrupt himself, and conceals himself behind them, but each 
day extricates himself, and alleges that they still owe him 1,400 pounds 
Flemish for commission alone, on account of which he has now quar- 
relled with the Hochstetter, who won't pay it him. He is blamed for 
having brought them in and got them into ill repute. But he is clever 
enough, and will know how to carry the matter through.' In July, 1529, 
the same agent farther states: 'He now stands very well, but much is 
said behind his back. Financing the Court had profited him and des- 
troyed others.' This last refers to the Hochstetter who were then in a 
very bad way: 'They have got a bad repute; no one is here (in Antwerp) 
on their behalf except two servants; many fear that they will go to 
smash completely next quarter day.' 

In Antwerp Lazarus Tucher was considered responsible for the fall of 
the house. Joachim Hochstetter himself blames the Greshamsfor having 
ruined his credit; and in Lyons there was another scapegoat. By March, 

Brewer, Lc. Nor 3087 (22), 3863, 4018, 4147, 4552, 4662. Gairdner. Calendar V, 
No. 1774, belongs here. The date 1532 is certainly wrong. 
Lille, Chambre des Comptes, B, 2345, and 2357. 


1528, the Tucher's agent sends information from Lyons 'that this 
quarter day the Hochstetters have almost lost their credit, so that no- 
body was willing to let them have money on bills.' 'The servant of the 
Manlich did them a lot of harm by speaking too loud about them, and 
has let them have nothing on bills, so the brokers we're induced to warn 
one another of them. They had to pay a balance of 26,000 crowns here, 
but they could only get 6,000 crowns without giving security. Finally 
they induced Hans Welser and Marcus Lauginger to back their bills. 
Further, Matthew Bern - this was their agent in Lyons - had assigned 
to Wolff Harstorf er his body and property, and also all the quicksilver, 
cinnabar and copper belonging to the Hochstetters in Lyons, together 
worth 14,000 fl. If this had not been done they must have failed, for 
they had accepted all bills of exchange. In Augsburg, too, there was 
a powerful 'run' on the house, which, in fact, in a short time paid out 
some 400,000 fl. At the last moment they made over a claim of 200,000 
Carolus gulden on the Court of the Netherlands to the Fugger and Jean 
Marcelis in Antwerp; this was disputed later on by the unpaid creditors. 

In the spring of 1529 the old Ambrosius Hochstetter implored the 
Fugger to help him in his need. He proposed that the creditors might 
choose representatives to whom he should disclose the whole of his 
assets and liabilities. This actually appears to have been done. But the 
further proposal, that 100,000 fl. should be collected to maintain the 
house, was not carried out. The chief creditors preferred to be satisfied 
at once, which naturally made the catastrophe unavoidable. 1 

At the beginning of June, 1529, Lazarus Tucher took over claims of 
the Hochstetter in Portugal and Antwerp, as well as a large quantity of 
pepper that they had to receive from the King of Portugal. Further, in 
discharge of a debt which the Hochstetter had only contracted in Feb- 
ruary of the same year, he took over all their extremely valuable leal 
property in Antwerp. 2 

The liabilities of the Hochstetter amounted then to over 400,000 fl., of 
which more than 150,000 fl. had already been called in. Certainly they 
themselves estimated their assets at 661,000 fl., but, according to a sober 
estimate, they were only worth 180,000 fl., and could not with certainty 
be reckoned at more than 70,000 fl. In these circumstances the collapse 
could not be kept off. Only after long efforts, in which King Ferdinand 
through his own commissioner took an active part, was an agreement 
come to in February, 1530. 

The family never recovered from this blow in Augsburg. But one of 
the two sons of the old Ambrosius, the Joachim whom we have often 
mentioned founded a new branch of the family in England, which 


'Antuerpener SchdffenMefe, 2 and 8 June, 1529. 


flourished for a long time. Before the catastrophe Henry VIII had 
appointed him 'Principal Surveyor and Master of all Mines in England 
and Ireland.' 1 With his help the King wished to assist the English min- 
ing, which was then in its infancy. Joachim Hochstetter, with six other 
Germans, had offered to work all the mines discoverable in England, and 
as a start to introduce 1,000 miners from Germany. How far these high- 
flying intentions were then realized is quite uncertain. But in any case 
Joachim's son, Daniel, lived in England and was the chief agent of that 
large South German Company which under Elizabeth, as we shall see, 
appears, in fact, to have given a strong impetus to English mining. In 
the seventeenth and eighteenth centuries we come across his descendants 
in Hamburg as members of the Merchant Adventurers Company who had 
their chief factory there; this was the same Company which, under 
Elizabeth, had ruined the active trade of the Hansa towns with England 
There are certainly remarkable intricacies of industrial developments. 

The Herwart. The Herwart of Augsburg are one of the most interest- 
ing of the South German families, which makes it all the more regret- 
table that we know so little of their business. In 1498 and 1499 we find 
George Herwart and his brothers, one of whom was Christopher, par- 
ticipating together in the often-mentioned copper syndicate with the 
Fugger, Grossenbrot and the Paumgartner. This implies that their busi- 
ness was then akeady of importance. In 1511 Clais de Clerc, in Antwerp, 
is mentioned as agent of Christopher Herwart, and the latter with 
the Florentine, Filippo Gualterotti, was a creditor of the Netherlands 
Government, which had obtained loans from the two totalling 29,000 
livres Artois (at 40 gr. Flemish) for the war in Guelders, at a rate of 
interest about 20 per cent, per annum. 2 This is the first purely financial 
transaction that we hear of from a South German merchant from the 
Netherlands. Later on, too, we find the Herwart participating earlier 
and more largely in the financial transactions of the Netherlands than 
most of the other South German trading houses. In 1522 Marcus and 
Hans Herwart Brothers acquired a house in Antwerp. Their agent there 
then and in 1524 was Andreas Smut. In 1522 they paid out 10,000 livres 
Artois in Antwerp for the account of the Netherlands Government. 

In the same year, 1522, we come across in Antwerp another firm of 
the family - Christopher Herwart and Company - which lent the Court 
of Brussels 64,000 livres Artois at about 20 per cent. This loan was many 
times renewed and not paid back until 1525. Lucas von Stetten appears 
as agent of this firm. For the period from October, 1523, to December, 
1525, he claimed the sum of 10,251 arrears of interest, since the loan 

1 Brewer, Calendar IV, 5110. Also Ehrenberg, Hamburg und England im 
Zetiatter der Konigin Elisabeth, p. 5 ff. 
Lille, B, 2218. 

was mostly paid off in small instalments during this period: that would 
have been at the rate of 12 per cent, per annum. But the Netherlands 
financial administration was not willing to pay so much; finally, they 
agreed on 8,000 livres, which corresponds to interest at about 9 per cent, 
per annum. In the year 1529-31, too, Hans, Marcus, George, Christo- 
pher and Erasmus Herwart participated largely in the big financial 
transactions of the Netherlands Government. Once Marcus appears in 
conjunction with George, at another time with Christopher; while Hans 
and Erasmus are mentioned alone. George Meuting is mentioned as the 
Antwerp representative of Marcus, Christopher, and Erasmus. 1 In 1542 
the city of Antwerp took up a loan from the heirs of Hans Herwart. It 
is certain that some members of the family had settled in Antwerp. 

King Ferdinand, too, repeatedly obtained large loans from the Her- 
wart. Thus in 1528 45,000 fl. (of which 20,000 fl. was in linen and cloth) 
from Christopher Herwart in conjunction with Pimel; 13,000 fl. in 1541; 
95,000 fl. in 1546; 100,000 fl. in 1547; and 199,442 fl. in 1549. 2 

Part of the family remained true to the Catholic faith. In particular, 
Hans Herwart was one of those whose letters were opened by the Pro- 
testants in the Schmalkaldian war; while George, who was Burgomaster 
in 1546, belonged to the opposite party. It is very doubtful whether this 
Hans, whose anti-Protestant attitude we have just mentioned, is iden- 
tical with theancestors of the same name of the later Augsburg line of the 
family. For the last-mentioned Hans was a son of the Protestant Burgo- 
master, George Herwart, and his sons again participated to a quite 
prominent extent in the loans of the French Crown, with which, since 
that time, the fortunes of the house were involved in a wonderful manner. 

In 1546 we hear for the first time that the Herwart, through the 
agency of Hans Kleberg, participated in a loan of the French Court 
raised in Lyons. But we do not know which members of the family they 
were. In 1553 Hans Paul and Hans Heinrich Herwart (the sons of Hans 
and grandsons of George) participated with 46,500 crowns in the great 
loan which the foreign merchants in Lyons had granted to the King of 
France. Of these two brothers Hans Paul, in 1576, after the failure of the 
house of the Manlich, became insolvent, and made over to his creditors 
amongst other things his claims on the French Court. The other brother 
continued the family in Augsburg, where it, however, never attained to 
a particularly prosperous condition. 3 

* Antwerpener Schoffenbrie/e, 7th Nov., 1522, 6th Feb. and 15th Nov., 1624; Lille, 
B, 2301, 2315, 2320, 2351, 2357, 2361. Antw. Stads-Protocollen ed. Pauwds, I, 33. 

* Thorsch, MateriaKen.z. Einer GesMchte der osterr. Staatasckulden, pp. 28, 34, 

* For the bankruptcy of Hans Paul Herwart cf. Hans Herwarth von Bittenfeld 
in der Ztscto. d. Awfor. Vereins f. Schwaben, IX, 147 ff. Cf. v. Stetten, Gesch. d. 
augsb. Geschlechter, and Seiferts, Genealog. Tabdlen. 


On the other hand, two other sons of the Burgomaster George, Ulrich 
and Jacob Herwart, settled completely in Lyons. Jacob died there 
young in 1572; while Ulrich, who had married a Welser, left descendants 
in France. Of these Daniel (born in!574, and married in Lyons in 1599) 
is worthy of mention, because his sons, Bartholomew and John Heinrich 
Herwart, played an important part under Louis XIV. This will occupy 
us later. 1 

Hieronymus Seller. Sebastian Neidhart and His Heirs. Hieronymus 
Seiler is the stepson of Bartholomew Welser whom we already know of, 
who at first had been in the Welser Company and then with Alexius 
Grimel, a former agent of the same company, and had during 1536-45 
carried on financial business in Antwerp in conjunction with the Floren- 
tine Gaspar Ducci. This company was international. They lent money 
to the Court of the Netherlands, but if they could utilize it better at 
Lyons and with the French Court, they did it in spite of the Emperor's 
prohibition. Political events only interested them so far as they had an 
influence on business and business profits. In 1544 the Seiler and their 
associates lent to the Netherlands Government 100,000 fl. at 16 per cent, 
per annum on the alum tax. But the business went over into other 
hands; and since soon after there was more to be made in Lyons than in 
Antwerp the company remitted from the last-mentioned place to the 
former large sums which should be lent to the King of France in the 
name of Seiler, because he was Swiss by birth and so a neutral, and 
belonged to a race particularly protected in France. The business with 
Lyons had to be carried on very cautiously and secretly, since the 
Emperor repeatedly had suspicious letters opened. Sebastian Neidhart 
also took a large share both in the Netherlands business of 1544 and in 
the operations conducted in Lyons in the following year. He was a son- 
in-law of that Christopher Herwart in Antwerp who has often been 
mentioned. As his heir he is mentioned in 1530 in connection with the 
imperial finance in the Netherlands. We then find him, too, in the 
Fugger balance sheet for 1536, in their large Spanish financial transac- 
tions, and in the ledgers of the Haug for 1541-7 as having, together with 
the Haug and the Fugger, a still larger interest in the loans granted by 
these companies to King Ferdinand. Also, in 1546, he had lent the 
Fugger the considerable sum of 14,570 pounds Flemish at 2J per cent, 
per quarter. 

Sebastian Neidhart was an international financier. That especially 
came out in the war of Schmalkalden. At that time the Protestants 

1 What follows is chiefly drawn, from the documents in the Augsburg Staats- 
arehives. For the lawsuit against Neidhart, Seller, Ducci and Partners see 
AngsbnrgerChroiiiolers(e.g. die Chronik 1648-63 im Augsb. Stadtarohiv, Schatze 
lOa). Also Sentences du corueil dc Brabant in the Brussels Archives. 


suspected him and had his letters opened. But, at the same time, in 
conjunction with Seller, Grimel, and some other South Germans, as well 
as with the Florentine Simon Pecori, he established a trading company 
in Lyons which was managed by Pecori. In Antwerp this company 
again came into connection with Gaspar Ducci and carried on a flourish- 

a August, 1546, just at the time when his letters were being opened 
by the Schmalkaldians Neidhart writes from Augsburg to Seller, who 
was then in Antwerp, 'I should have no objection to lending half (of the 
company's capital) to the King of France.' Seller agreed; Grimel recom- 
mended that the sum should be lent to the merchants in Lyons, which 
was safer. But he was outvoted, and Pecori did, in fact, on behalf of the 
firm, participate in October, 1546, in a loan to the French Court with 
20,000 kronen at 4 per cent, per quarter = 16 per cent, per annum. 
The King then used this money to support the German Protestants. 

In the following years this traffic was continued and gradually be- 
came of larger and larger dimensions. The company remitted and 
drew bills of exchange continually between Antwerp and Lyons. When 
money was abundant they borrowed and sent it where it got the highest 
rate. Soon individual partners, especially the two Florentines, tried to 
produce an artificial tightness of money in Lyons. Neidhart advised 
against this at first because it was dangerous and fundamentally 'an 
ungodly business, by which wealthy people must be undone, so that I 
think when this business is finished I will never go into a similar one, 
because it is cargo consdentice.' But he also wanted to get as high a rate 
of interest as possible, and finally himself gave advice how to make 
money still tighter. He feared, however, that as soon as Bartholomew 
Welser and his stepson, Hans Paul Herwart, got wind of the affair they 
would operate powerfully against it. In 1549-50 the company had lent 
to the King of France more than 100,000 kronen, the greater part of 
which belonged to Sebastian Neidhart. 

The Court of Brussels had long suspected the dealings of the company 
and had, it appears, received a direct denunciation from Antwerp, 
where Ducci was generally hated, and at the beginning of the year 1550 
had seized a number of letters of the company with remittances for 
Lyons. Since their contents were suspicious Seller, Grimel and Ducci 
were imprisoned; after some months, however, they were set at liberty 
on heavy bail. The accusation was of usury and monopoly. In the 
reasons alleged it was stated that the accused had attempted to force 
the Antwerp Bourse so that the monetary position should be regulated 
as they wished. The Procurator-General demanded: against Seiler and 
Grimel, confiscation of all their goods and perpetual banishment from 
the Emperor's territories; for Ducci, the death penalty, and, if necessary, 


at first examination under torture. But, finally, the case dragged on till 
the end of 1551 - Grimel and Seller were condemned to pay a fine of 
60,000, and Ducci one of 20,000 Carolus gulden, and to pay the costs. 
So the punishment of the two Germans was materially heavier than that 
of the Florentine, who possessed powerful patrons in Brussels. 1 

Since this nothing more is told of Hieronymus Seiler. On the other 
hand, Michel Seiler, a relative, perhaps his son, represented the Welser 
in Lyons from 1553 to 1580, and personally participated in the loans of 
the French Court. Grimel tried to rehabilitate himself by serving the 
Netherlands Government as money broker; yet he appears to have had 
little luck with it and vanishes completely after 1552. Ducci's part, too, 
was played out with the long case. 

Neidhart, who, it appears, was also imprisoned for a short time, must 
have died soon after. He left behind him four sons - Carl, Christopher, 
Paul, and Matthew. In 1553 Christopher Neidhart was the person who, 
next to the Florentine house Salviati, took the largest share in the great 
loan which the King of France had raised in Lyons. On the list his 
amount is 124,450 crowns, and, in addition, Gabriel Neidhart is on the 
list for 20,900 crowns. 

Finally, we possess a very interesting ledger of Neidhart's heirs for 
the period 1559-70, from which it appears that the heirs carried on the 
banking business on a large scale, but finally were ruined by it. In 1564 
the claim on the French Court had risen to 627,780 livres. It is true 
that up to 1567 20,000 livres were paid off. But the repayments ceased, 
and in 1570 the claim amounted to 496,583 livres, or 269,882 Ehenish 
florins. After that no more was ever got in. The firm then had a claim 
of 120,132 fl. against the King of Portugal, which likewise remained 
unpaid. This claim, too, was a very old standing one. Further, Neid- 
hart's heirs participated in the advances which the German merchants 
in Lyons granted to the Cardinal of Lorraine and the Duke of Guise, the 
arch enemies of the Huguenots, in order, through their mediation, to 
obtain reimbursement of their claims on the French Court. But this did 
not happen, and the Guise gave just as little heed to repaying their own 
debt. Money was also lent to the Infante Don Carlos of Spain on 
inadequate security of jewels; the money should have been repaid in 
1567, but was not, and since the Prince came to a tragic end the next 
year the debt was still outstanding in 1570. It was the same with a debt 
of the Duke of Florence, which dated from the year 1553. In short, the 
total assets of Neidhart's heirs, which at the end of 1570 were computed 
at 494,335 fl., consisted almost entirely of barren outstanding debts.* 

1 According to his actual documents. The Augsburg Chronicler gives a different 
* The ledger is in the Augsburg Archives. 


The Neidhart were closely connected with the Manlich by buBinesa 
and family ties. Gail Neidhart was the son-in-law and partner of the 
older Melchior Manlich. When the Manlich failed in 1574 it was all over 
with the Neidharts, and the family in Augsburg became extinct with 
Carl's sons in 1625. 

The Manlidi. The Manlich of Augsburg are mentioned as important 
traders in goods in the business correspondence of the Tucher for 1526-S, 
and in truth they at that time were people of some consequence both in 
Lyons and Antwerp. Until the fall of their house they remained whole- 
sale merchants proper, and just before the catastrophe they carried on 
from Marseilles - where they had set up a factory - an unusually im- 
portant direct trade by sea to the Levant with their own ships. This had 
been done by no other German trading house. But like almost all the 
other merchants of Augsburg they could not resist the temptation of 
taking part in the business of lending to princes, which brought them 

In 1543 Mathias Manlich, in Antwerp, in conjunction with the Faum- 
gartner and the Haug, lent King Ferdinand 60,000 fl., and the Nether- 
land Government in bonds of the Receivers General a sum which is not 
specified. During the years 1543-62, Melchior Manlich had a share in 
the Haugs, 1 

In 1553 Mathias Manlich lent the Fugger 14,000 fl.; two years after- 
wards he took a lease of the copper output from Neusohl in Hungary 
and granted King Ferdinand a new loan of 97,750 fl. In 1559 we also 
find Manlich financing Ferdinand. But their ruin was not due to this, 
but rather to their share in the French financial transactions. How this 
participation came about and how large it was cannot, unfortunately, 
be ascertained from the material available. But how large it must have 
been appears from the fact that in 1564-7 Oswald Seng, the Manlich 
agent in Lyons, managed the syndicate which represented the interests 
of the South German creditors of the French Court. And in November, 
1573, when the house was on the verge of bankruptcy, Adam Hartlieb, 
who then for a short time had been in the service of Melchior Manlich 
the elder, rode to Lyons with Carl Neidhart, Melchior's son-in-law and 
partner, to rescue there what was to be rescued. Shortly before the 
Manlich, in Marseilles at any rate, enjoyed the best credit. But at the 
end of 1573, or the beginning of the next year, the catastrophe arrived. 
That in the Netherlands the Gueux had taken away 50,000 fl. worth of 
pepper helped to accelerate the crash. The liabilities of the house are 

1 Ci for the following: Oberleitner, Archiv, fur Kunde osterr. Gtsch.-QueUen, 
XXH, p. 101; Thoraoh, l.o. p. 44; v. Stetten, GesehicJOe von Augsburg, I, 602, 
608; Hans Ulrich Kraffts, Denkwtodigkeiten, bearb. v. A. CoJm; Hans Hartlieba 
Tagebuoh (MS. of the Hartlieb family). 


given on the one hand as 70,000 fl., but, on the other, and moie prob- 
ably as 307,554 fl. Their Levant agent, Hans Ulrich Krafft, confident 
of the solvency of the house, guaranteed their extensive obligations, 
with the result that he spent three years in a debtor's prison, of which 
he composed a detailed and very attractive account. 

The Adler. The Adler of Augsburg appear early in the history of 
South German financial business, but they also vanish again- betimes. 
In 1507 the Venetian Quirini numbers them with the Fugger, Welser, 
Hochstetter, Gossembrot, Paumgartner and Herwart as the seven great 
trading companies of Augsburg, which at that time lent the Emperor 
Ma^niiHan 150,000 fl. on the security of landed property.* In 1522 we 
come across Fhilipp Adler in Antwerp, where he conducted for the 
Netherlands Government an exchange business with South Germany, 
which, it must be admitted, was not a very important one. In 1530 the 
Emperor borrowed 18,000 kronen from him in Antwerp, in respect of 
which 20,160 kronen was repaid in Antwerp after half a year, which 
means that this transaction cost the Emperor 24 per cent, for exchange 
difference and interest. The sum was got in in Antwerp through Jacob 
Welser. After this we do not hear anything about the Adler. 

The Bern. The Bern in Augsburg had no conspicuous or independent 
significance in the dealings in capital of the sixteenth century. As agents 
of the Welser and Hochstetter, they served these great trading houses 
truly in their business, but then quarrelled with them and left them. 
Thereupon, in 1518, the brothers Lucas and Andreas Bern established a 
business of their own which then often participated in the great financial 
transactions of the Fugger. Also, in 1522, they paid to Franz Sickingen 
for the Emperor an advance which after six months they received back 
from the Netherlands Government. This would scarcely have been a 
sufficient reason for a particular mention of them here, but the Bern 
family were fond of writing. A cousin of the two brothers just men- 
tioned composed a chronicle of Augsburg, and Lucas Bern kept a diary 
which is justly used as an important source for the history of civiliza- 
tion. Here all that is important is the statement - to which we are in- 
debted to Lucas Bern - of the profits of his company. This shows rates 
of profit varying from 2J per cent, to 14$ per cent., or an average profit 
of 8} per cent, per annum over 21$ years, which is by no means a high 

in 1541 his share in the capital amounted to 57,000 fl. His son of the 
same name succeeded in almost six months (reckoned from the time 
Bern joined the Welser Company) in losing the money earned by his 
father in twenty years of hard work. 

* AlMri, Jfeto* d. Ambatc. Venet., XIV, 28; also Lille, Chambre des Comptes, B, 
2301, 2363; Lanz, Correspandenz, I, 405. 


Lucas Bern the younger was one of those who as early as 1546 re- 
mitted money from Antwerp to Lyons in order to lend it to the French 
Court there. He then participated more and more in this finance busi- 
ness of Lyons. Thus in 1558 he put in 63,000 livres all at once. That 
was fatal to him. He was one of the numerous Augsburg merchants who 
had to suspend payment in 1562, and he died soon after. 

The Haug and their Relatives. This Augsburg house, considerable in 
itself, is important for us owing to the circumstance that we possess the 
chief books of the company for a period of more than thirty years, and 
from them can follow out very well the business activity of the firm, and 
in particular how they got more and more involved in big financial busi- 
ness and how the trade in goods fell into the background. 1 

On 1st September, 1531, Anton Haug the elder, Hans Langnauer and 
Ulrich Link, with some partners of secondary importance, signed 
articles of partnership for six years, and also took into partnership a 
number of their employes. The total capital amounted to 90,815 fl.; 
the number of partners was seventeen. The firm had agents in Antwerp, 
Venice, Cologne, Nuremberg, Ulm, and Schwatz in Tyrol. They obtained 
spices, silks and cotton from Venice, copper and silver from Schwatz, 
spices and English cloth from Antwerp. In Ulm and Augsburg they 
wove wool into fustian and sent it for the main part to Antwerp. But 
they carried on pure loan business as well with Ki^g Ferdinand, in 
which they partly operated alone, partly in conjunction with the Fugger 
and the Herwart. 

When two years had elapsed the company with 90,815 fl. had gained 
no less than 85,461 fl. - that is, 47 per cent, per annum. Because of this 
heavy profit 20,000 fl. were put to reserve, and after withdrawing 
10,000 fl. a capital of 144,000 fl. was carried forward. 

On the 25th August, 1533, the assets in round figures were 410,000 fl. 
Of these 92,000 fl. represented the financial transactions with the Aus- 
trian Court. The rest consisted in the main of goods, documents 
representing goods, and cash. In Augsburg the assets amounted to 
111,000 fl.; in Antwerp, 86,000 fl.; in Cologne, where the silks were 
mainly sold, 25,000 fl.; in Venice, 16,000 fl.; and 60,000 fl. were employed 
in the Schwatz business, and so on. 

The liabilities consisted of 235,000 fl. in eighty-nine items, of which 
the most considerable belonged to the wives and children of some rela- 
tions and friends. 

We have no information for the years 1533-5. But these years must 

have been extraordinarily favourable for the business, for the capital 

with which in 1535 they entered into a new partnership amounted to 

340,000 fl., although meanwhile many partners had retired. Allowing 

'The ledgers are in the Augsburg Archives, 


for the shares of these, the capital must have trebled from 1533 to 1535. 
It is given as 90,815 fl. in 1531 and 340,010 fl. in 1535. But after this 
brilliant development a period of stagnation followed. In the eight 
years 1535-43 there was only a total profit of 82,744 fl., which makes 
about 3 per cent, per annum. During this period the business in goods 
was continued, a new factory established in Lyons; on the other hand, 
one at Cologne was given up. 

In the balance sheet for 1543 the increase (probably a recent one) of 
the Antwerp financial business becomes prominent. In this way almost 
30,000 fl. (= 140,000 fl.) were invested; but, on the other hand, the 
sums of this kind outstanding in Germany only totalled 55,000 fl., and 
thus were considerably lower than in 1533. At that time the firm had 
had no financial transactions in Lyons. 

Meantime, Hans Langnauer had died; his capital for the most part 
remained in the business as a deposit-carrying interest. Melchior Man- 
lich and a younger Hans Langnauer entered tike firm, but both brought 
in little, so that the capital of the company was diminished by about 
90,000 fl. and was carried on as only 295,067 fl. for the new partnership. 

The next two years were again very favourable. With 295,067 fl. 
there was a profit of 94,928 fl., that is 16 per cent, per annum. 'But after 
this time the course of all business was anxious and heavy, and one must 
be apprehensive of waste' - it was shortly before the war of Schmal- 
kalden - so 6,023 fl. were put to reserve. 

The claims from the Antwerp financial business amounted in 1545 to 
40,000 fl. (= 180,000 fl.), so they were about 10,000 higher than in 
1543; on the other hand, the German financial engagements had de- 
clined to 46,000 fl. 

The two years 1545-7 brought in good profits; on 356,000 fl. there was 
a profit of 98,000 fl., or about 14 per cent, per annum. The next two 
years were still better; in them on 365,000 fl. a profit of 124,000 fl. was 
attained, i.e. 17 per cent, per annum. 

The German 'Court contracts' fell off in this period, while the claims 
arising out of Antwerp financial transactions increased up to 1549 to 
53,600 fl. (= 230,000 fl.). But, as well as this, in 1547 there was in 
addition a claim of 36,000 crowns on the French Court, which up to 1549 
increased by compound interest to 40,000 crowns or 60,000 fl. 

In 1549 the total capital was diminished by 200,000 fl., and went back 
to about the position of the year 1535. The firm's name then was 'Ulrich 
Link, Anton Haug and Relatives.' But this great reduction of capital 
was not due to any mistrust for the future of the business, but appar- 
ently arose from the desire of the partners not to let too much capital 
share in the profits, especially the shares of the deceased partners in the 
capital. These were at once received again as deposits at interest. Since 


this time the capital of the company diminished more and more, while 
the deposits of the former partners increase more and more. 

In particular, after the balance sheet of 1553, Ulrich Link and Anton 
and Lienhard Hang went out of the firm. After that their capital 
carried interest at 7f per cent. In 1555 Hans Pimel retired, so that only 
eight partners remained. This number sank to four in 1560, which pre- 
sumably was due to the increasing distaste for business of the more 
cautious elements. The partners who remained plunged into more enor- 
mous and world-wide undertakings, which were directly forced on them 
by the enormous quantity of deposits at high interest at their disposal. 
The profits were very goed during this period. But if we reflect how 
small the capital was compared to the turnover, the average profit does 
not appear to be remarkably high. 
The average yearly profit was: 

Per cent. 

1549-51 12 

1551^53 11| 

1553-55 11 

1555-67 10J 

1557-60 40 

1560-61 10J 

The real solid trading went more and more into the background. The 
chief activities of the firm were directed to money transactions and par- 
ticularly in carrying on the copper mining works at Schwatz and the sale 
of the copper produced. 
According to the balance sheet of 31st December, 1561, there was: 


Locked up in mines, houses and barren debts 200,000 

Lent to the Emperor 212,000 

Stocks in hand, chiefly copper 157,000 

Divers debtors 219,000 

Cash in hand 122,000 

fl. 910,000 
Against this their own capital (including the profits for 

1560-61) was 268,000 

Borrowed capital 642,000 

A very critical position for a business to be in. Now, at the end of 
1562, Melchior Manlich retired from the business, leaving only three 


partners'- David Hang, Hans Langnauer, and Melchior link. The capi- 
tal will also have become smaller, but unfortunately this cannot be 
established since no more balance sheets are available. On the other 
hand, we know that for the claim on the Emperor they had been given 
a charge on the produce of the Hungarian copper, and this gave the 
company almost the same control of the copper trade as that which the 
Fugger possessed earlier. It appears they were led on to establish an 
undertaking far beyond their strength for the improvement of English 


At that time English mining was still a very small affair, and in the 
main limited to working very ancient (prehistoric) tin and lead mines. 
The Germans, on the other hand, were the foremost miners of the world, 
and had developed the technique of mining to a high state. South Ger- 
man capital had especially, since the middle of the fifteenth century, 
co-operated prominently in this. So the English Kings since Henry 
VIII tried to interest German capitalists and miners in the mineral 
riches of their land. Like so many other industrial and political measures 
of the Tudors they first came to maturity under Queen Elizabeth. 
In 1564 a large company for prospecting for and winning minerals in 
England was promoted by the firm of David Hang, Hans Laugnauer and 
Relatives. In this the highest English statesmen and officials took 
shares. Dealings between the English Government and the Augsburg 
merchants were mainly in the hands of some new partners in the firm. 
Of the twenty-four shares the Haug firm took eleven; Elizabeth's 
minister, Cecil, two; Lord Leicester, two; and so on. At first they oper- 
ated copper mines at Keswick and lead mines at Colbeck. The under- 
taking was far beyond the powers of the Haug and does not appear to 
have made a profit so long as they had an interest in it. We can here 
only state the result. In 1574 the Haug had to suspend payment. 

Jakob Herbrot. Jakob Herbrot earned a position for himself in the 
Augsburg trading world. He was a well-known opponent of the Em- 
peror Charles, and of the great Catholic patrician houses of Augsburg. 
He was the only one who used his resources directly in the service of his 
political and religious convictions. 1 

In 1520 he began business with 1,200 fl., and in the course of the 
following twenty-five years acquired so much property that in the war 
of Schmalkalden he could assist the Evangelicals with considerable 
sums of money. As head of the merchants gmld, he was the recognized 
leader of the party of decidedly Evangelical views, who had their 
strongest support in the guilds. He became Burgomaster and drew on 
himself the hatred of the Catholic patricians, who had been robbed of 
their influence by him, and to such an extent that this later accelerated 
Heokerinin Der Ztsehr. d. histor, Vereitu fur Schwibm, Bd. L 

his ruin. However, the real cause was the same as in the case of so many 
other Augsburg merchants - excessive credit. Jakob Herbrot had made 
considerable loans to the Emperor Ferdinand and the King of Poland, 
and to do this had himself borrowed largely. When, then, in 1562 there 
arose a general mistrust of the Augsburg trading community, there was 
also a 'run' of the Herbrot's creditors. The Emperor Ferdinand in- 
structed Melchior Ilsung, the Governor of Swabia, to borrow 30,000 L 
in Augsburg to help the man who had got into difficulties chiefly through 
the advances he had granted to the Emperor. But as soon as it leaked 
out that the money was meant for the hated Democrats 'the counting 
houses and the Perlach' (the Bourse) would not give anything. Jakob 
Herbrot had to suspend payment and died in a debtors' prison in 

The Tucker. In contrast to the condition of business at Augsburg, 
that at Nuremberg on the whole kept clear of financial business 
proper until the time of the war of Schmalkalden, although, as we have 
already seen, individual Nurembergers entered into the financial service 
of the Emperor Maximilian and some others, as we shall see later, at- 
tained to great importance and riches as financiers in Lyons and Ant- 
werp. They soon divested themselves of their Nuremberg origin and 
became French and Netherlanders. Of the large traders properly settled 
in Nuremberg, it was only the branch there of the Welser which in early 
times carried on large financial transactions, especially in conjunction 
with the Fugger. They, however, until the war of Schmalkalden, kept 
within the limits of the usual prudence of merchants of Nuremberg. It 
was only when just before the war that the French Court, through Hans 
Kleberg, whom we shall get to know later, knew how to make use of the 
South German merchants who frequented Lyons, that the Nurem- 
bergers, too, began to turn from trade to finance. They were mostly 
Protestants, or at any rate not unconditionally attached to the Em- 
peror. Only one of the great Nuremberg trading houses - the Tucher - 
kept off from the loans to the great Powers which gave a high rate of 
interest, but were very risky. 

The two generations of the Tucher who come under our consideration 
here exhibit the best types of sturdy and solid German wholesale 
traders, whom we know of in the sixteenth century. Anton Tucher 
(1457-1524), the chief Burgomaster ('Losunger') of Nuremberg since 
1505, a remarkable man, who was highly regarded by the Elector Fred- 
erick the Wise of Saxony ('he praised him above all the burghers of the 
Empire'), carried on in conjunction with his cousins, Hans and Martin, a 
considerable trade, chieflywith Lyons. His son, laenhard Tucher (1524- 
68), with his cousin Lorenz, continued and considerably extended the 
business, especially by establishing a factory at Antwerp, so that the 


firm had establishments at the two financial centres of the world at that 
time. By means of the factories they carried on a very considerable 
trade in goods. But when in 1545 Hans Kleberg, like most of the other 
South German merchants who frequented Lyons, wished to persuade 
the Tucher to participate in that loan to the French Court, Lienhard 
Tucher wrote to his agent at Lyons that he and his cousin Lorenz had 
resolved not to involve themselves in such business with great 'Heads.' 
Lienhard Tucher again and again enjoined this principle on his junior 
partners and agents, and remained proof against all attempts. Thus he 
brought it about that his business suffered only a comparatively small 
loss through the great credit crisis of the years 1557-62. Lienhard 
Tucher, too, like his father, was for many years first 'Losunger' of 
Nuremberg, and in addition a conspicuously sturdy merchant of wide 
outlook, whose wise business principles deserve to serve as a model. In 
this soundness he affords a very characteristic contrast to Lazarus 
Tucher, a distant collateral relative, whose bold and fortunate financial 
dealings we shall get to know of later. Lazarus Tucher had no close 
business relations with the Nuremberg firm. 1 

The ImAof. The Imhof , too, remained longer than the other big trad- 
ing houses of Nuremberg in the ways of solid trade, but they had no 
fundamental objection to financial business. During the period we are 
considering here, the large trade of the Imhof with Italy, France, and 
the Netherlands was mainly conducted by Endres Imhof under the firm 
name of Endres Imhof and Brothers. Endres Imhof played a conspicu- 
ous part in the public life of Nuremberg. He had a seat on the Council 
for fifty-six years, and in 1565 succeeded Lienhard Tucher in the office of 
first 'Losunger.' As a business man he exhibits a combination of the 
qualities of Lienhard Tucher and the majority of the other South Ger- 
man merchants. When in 1545, as a result of Hans Kleberg' s power of 
persuasion, these began for the first time on a large scale to pour their 
money in the bottomless cask of French finance, the Imhof as well as 
the Tucher held back, so that Kleberg noted both houses as 'too ex- 
tremely careful.' But later on the Imhof ceased to draw back, and par- 
ticipated to an increasing extent in the profitable financial businesses of 
the Bourses of Antwerp and Lyons. Endres Imhof, however, was at 
least sufficiently prudent after each account to withdraw his share of 
the profits from the incalculable risk of this business. In 1544 his share 
in the capital of the company was 15,000 fl.; in 1548 it sank to 12,000 fl.; 
and after 1550 remained at 14,000 fl.; while the very high profits were 
partly entirely taken out of the business and partly left in it as deposits 
at 5 per cent. 

1 Of. Ehrenberg, Hans Kleberg, 'der gvte Deutsche' (MitOi. d, Vereins f. Geseh, 
d, Sfadf Ntmberg), Nuremberg, 1893, p. 24 S. ' 


The profits, from 1544 to 1560 (excluding the years 1554-6), average 
18 per cent, per annum. 

For the years 1560-4 we do not know the profits, but we know them 
again for the years 1564-70, in which they were 77 per cent, in all, or 
12| per cent, per annum. In 1570 Bndres Imhof retired from the part- 
nership and left his capital of 42,100 fl. in the business only as a deposit 
bearing 5 per cent. In his lifetime he repeatedly made over large sums 
of capital to his sons. 

Concerning the participation of the Imhof in the big international 
finance we possess some very interesting instructions, given in 1549 by 
the company to Paul Behaim, their Antwerp agent. It enables us to see 
how the Imhof at that tune invested their funds. We will here give the 
chief contents: 

The firm of Bndres Imhof and Brothers, in conjunction with an 
associated firm of the family, Sebastian and Hieronymus Imhof (the 
last of whom had settled in Augsburg, where he founded a branch 
of the family which still flourishes), under the name of Bartholomew 
Welsers Company, lent to the Court of Brussels 6,615 1*. 6 gr., of which 
4,410 Is. belonged to Endres Imhof and Brothers. This share in the 
'Court paper' they now wished to have for themselves, and to dissolve 
the association with their relatives. They wished to 'have lying at the 
Court' the sum which was just falling due. But since the agent was not 
acquainted with the financial agent of the Court of Brussels, he was 
directed to request the Antwerp agent of the Welser to extend the re- 
payment of the money of the Imhof, as far as possible. 'As to price and 
conditions, we should be content with the terms the Welser make for 
themselves, but we hope that the Court will not give less than 5 per cent, 
(for 2 fairs = half a year), since more could easily be got if, e.g., the 
Emperor or the "King of England wished to get ready money from the 
Bourse. But if you cannot get the Welser to promise that they will pro- 
long our money, then get into touch with Kaltinhofer and Foschinger 
(two South German financiers who had settled in Antwerp and whom we 
shall get to know) and notify them that if they wish to deal with the 
Court this quarter day, you are willing to employ 25,000-30,000 Carolus 
gulden on behalf of your principals. If you do business with them you 
must satisfy yourselves beforehand that the Welser will pay us; for if 
they do not, and you had promised a sum to the others, then we should 
have too much in one place. If you lend out the money through Ealten- 
hofer or Poschinger then we should like to have the promissory notes in 
our own hands; but if that is not possible we should be content to get 
from them a sufficient bond.' 

The firm also possessed bonds of the town of Antwerp for 7,875, but 
only 2,100 belonged to them, while the rest was the share of the other 


Imhofs and the above-mentioned PoscMnger. These had then fallen 
due: 'Our 2,100 and 1,900 more we would willingly once more prolong 
at the highest possible rate of interest for another six months on such 
bonds under the great seal of the town of Antwerp and under the condi- 
tions of which you have a copy. If much ready money is withdrawn 
from the Bourse, or if sundry people should come together to make 
money tight (Strettezza), money will be dearer this quarter and the 
town of Antwerp will give more than 5 per cent, (for half a year); other- 
wise we should be content with that. And no matter whether money is 
tight or plentiful the town of Antwerp we think will in any case pay 
as much as good firms in the Bourse (dita di bursha). We should then 
like them as much, and prefer them to dita di bursha. But if they pay 
J or | per cent, less than these and you can do business with the firm 
which Bair (the former agent of the Imhof in Antwerp) have told you 
of, then take the money away from the city and give it them.' 

We see from this how zealously the Imhof thought of the most profit- 
able way to employ their capital, but that, all the same, they did not 
forget caution. This was, in any case, the chief service of Endres Imhof 
himself. For, as we see from their correspondence, the junior partner 
pressed vigorously for a greater participation in the French loans. 
Endres only slowly gave way to this pressure. 

In 1552 the firm first embarked in the business of bonds of the Nether- 
lands Receivers General; however, the total was not very considerable. 
The next step was that in 1553 some individual members of the family 
took a conspicuous part in the French Crown loans: Sebastian Imhof 
with 14,100 livres; Lienhard Imhof in Augsburg with 5,000 livres; and 
Michael Imhof with 12,000 livres. But the chief firm seems at that time 
still to have preserved its customary restraint towards these French 
loans. It is true that just at this time it had already taken in hand a 
financial transaction on a large scale somewhat closer. 

In the years 1553-4, the town of Nuremberg needed uncommonly 
large sums of money for the war against their mortal enemy, the Mar- 
grave Albrecht (Alcibiades) of Brandenburg Kulmbach. When this war 
was over the town began to extend and enlarge their fortifications, and 
in particular to build the colossal towers in the wall which to-day yet 
excite our astonishment. This likewise cost a great deal of money for 
years. Particularly in the war with the Margrave very large sums had 
to be made liquid in great haste. The old way of selling annuities on the 
town was insufficient; the town had to follow the example of the great 
princes and take up floating loans from merchants. 

At first Endres Imhof formed a consortium to which, as well as his 
firm, Sebastian and Hieronymus Imhof and the Augsburg Welser be- 
longed. This consortium advanced to the town of Nuremberg the large 

sums it was in need of at 12 per cent., and borrowed again at a lower 
rate of interest at Frankfort am Main, Antwerp, and other places. 

At first it was a matter of about 110,000 ft., of which the Welser 
brought in 60,00 fl. and the Imhof 50,000 fl. But soon further sums 
were added. In the autumn of 1553, owing to the large withdrawals of 
money by the consortium, money was tight in Antwerp. The impor- 
tance of the Antwerp Bourse for dealing in capital cannot perhaps be 
shown more clearly than by the fact that Paul Behaim, sinceheno longer 
acted for the Imhof, begged their Antwerp agent to let him participate 
in the loans of his native town in Antwerp. The Imhof, too, sent their 
agent, Paul Behaim, to Frankfurt am Main; but he for the most part did 
himself borrow the money, but employed the services of the brokers, 
amongst whom a conspicuous part was played by 'the modest Jew 
Joseph, at the sign of the Golden Swan.' This is the only time that a 
Jew is mentioned in the large financial transactions of the sixteenth 
century, and it is certainly characteristic that it happened at Frankfurt 
am Main, which was then a comparatively insignificant place for inter- 
national dealings in capital. Just because of this the Jews there from old 
times had kept a part of their importance in finance, while they were 
never mentioned in the great bourses of the world. Joseph the Jew 
procured the money for the Imhof chiefly in large sums. For example, 
the most considerable of these at the Easter Fair of 1554 was one of 
16,400 fl., lent by an abbot. For then everywhere - and this again shows 
how ancient this traffic is - the clergy took part frequently. The rate of 
interest at that time was 5-6 per cent. The Jew got 1 per cent, com- 
mission and a yearly stipend as well. When he wanted to get out of it 
some other little incidental profits, he was rapped on the knuckles; 
nevertheless, Paul Behaim had orders to deal with him mildly, since he 
was still needed. The turnover of the Imhof in this way amounted to 
100,000 fl. at many Frankfurt Fairs, and their turnover at Antwerp 
must at least have been as large. So far they only served the financial 
needs of the town of Nuremberg. The town at that time was trying to 
get money at any price, and the Imhof, who immediately had become 
the bankers of the Council, instructed their agents to take up all that 
was offered to them. This, however, changed when the war against the 
Margrave was over. 

Heretofore the town of Nuremberg was in the habit of paying only 
5 per cent, on their loans, which they effected by the usual way of selling 
annuities. For this reason they found it very painful that they had to 
pay 12 per cent, on the loans raised from the Imhof, and as soon as the 
most pressing need for money was over they tried to reduce this high 
rate of interest. Certainly the town had to leave outstanding at 12 per 
cent, that great loan of 110,000 fl. in which the Welser had participated 


with 60,000 fl., since with money so tight as it was then it was not so 
easy to find anybody who had such a large sum to lend them at a cheaper 
rate. But for the new sums lent to them they were not willing, after 
1555, to give more than 10 per cent. Only in the case of specially large 
sums they declared themselves ready to pay 10-12 per cent. As the need 
diminished, the rate of interest had to be reduced. Thus, in 1558 it fell 
to 8 per cent.; in 1561 to 6 per cent.; and in 1565 to 5 per cent.: at 
a time when the mightiest princes could scarcely get money on any 

Through these great affairs which Endres Imhof undertook for his 
native town, and apparently without any considerable profit for himself, 
he must have completely lost his former repugnance to pure finance. For 
after this time his firm took part in this, both in Lyons and Antwerp, to 
the largest extent: notes of the Court of Brussels, bonds of the Receivers 
General, bonds of the town of Antwerp, and particularly of the French 
Grown, were with large speculations in pepper, saffron, and alum, the 
subjects on which the business correspondence of the Imhof, in the years 
1555-62, chiefly turns. But the credit of the house remained excellent; 
in these years it was even better than that of the Fugger. If in 1553 
Anton Fugger had obtained a small loan from Endres Imhof, Hans 
Jakob Fugger in 1556 got one frombimof 10,000 fl., which, till 1561, was 
repaid by instalments. Even in the frightful crisis which in 1562 shat- 
tered the industrial position of the South German towns, the Imhof 
remained to all appearance unharmed. But they suffered frightful losses, 
and their inward strength was broken. In the French loans alone they 
lost 50,000 livres (the associated firm of Sebastian and Hieronymus 
Imhof 30,000 more); and they remained with 32,000 Carolus gulden un- 
paid on Netherlands Receivers General bonds. 

Endres Imhof died in 1579 at the age of eighty-seven, after he had 
completely retired from business for nine years. 

Other South German Trading Houses. There are many other South 
German business houses of which all we know is that they took a more 
or less prominent part in large financial transactions; yet our knowledge 
of the part they took is so incomplete, and it was in the main, too, only 
sporadic, that we here only give a summary account of them. 

In 1522 the brothers Pimel paid for the Emperor to Franz von Sick- 
ingen a sum which was repaid in Antwerp with 19,200 Carolus gulden. 
They made advances to King Ferdinand of 56,000 fl. in 1527, of 45,000 fl. 
in conjunction with the Herwart in 1528, and of 18,000 fl. again by 
themselves in 1530. In the following year in Antwerp the Netherlands 
Government paid them 15,000 crowns on their bills, against which they 
on their side had made payments in Germany. Then in 1541 we come 
across them with the Fugger supplying money to the Court of Vienna; 


and in 1560 Sir Thomas Gresham in Antwerp took up from them a loan 
for the English Crown. They are not mentioned after this. 1 

The Rehlinger of Augsburg were one of the trading houses who were 
definitely on the Protestant side in the war of Schmalkalden. Since 
they had a factory in Lyons the league wished to make use of them as 
intermediaries to procure the French subsidies there. In 1555 Christo- 
pher Rehlinger sent King Ferdinand 74,400 L; in the same year Hier- 
onymus Rehlinger the elder lent the English Crown a sum that is not 
stated, and also sold them saltpetre, 1,560; he, too, participated with 
5,000 livres in their Antwerp loan. Then their names vanished from the 
annals of finance. 2 

The Kraffter of Augsburg are only mentioned once, in 1551, in connec- 
tion with the financial affairs of the Court of Vienna. In 1562 and 1563 
they suspended payment, and their liabilities are given as 19,600ft. 8 

The Roth of Ulm were regarded in the war of Schmalkalden as 
undoubted adherents of the Evangelical Party. Yet they are not men- 
tioned in connection with the French financial transactions, but they 
were in 1541, 1544 and 1549, in connection with those of King Ferdi- 
nand. 4 

As early as 1546 the Zangmeister in Augsburg participated keenly in 
the French loans. In 1553 they appear as next to the Neidharts as the 
krgest subscribers with 99,400 crowns. In 1562 they had to announce 
to their creditors at the Town Hall of Augsburg, 'that they without suffi- 
cient thought embarked in multifarious and highly important transac- 
tions in bills of exchange, but they had chiefly wrought their own des- 
truction by locking up their money behind the Crown of France, since a 
large sum of money for some years had been outstanding there without 
producing interest, which they themselves had had to borrow at a high 
rate of interest.' 

They offered to make over to their creditors their business with all the 
stock and book debts, and in case of necessity to pay for their evil deeds 
with their 'body and life.' This is the last we hear of this trading 
company. 8 

For a time the Ligaalz and the Fleckhamer - two Munich firms who, 
nevertheless, had their main business in Augsburg and Antwerp - must 
have played a conspicuous part. In 1526 Earl Ligsak was mentioned in 

1 Lille, Chambre dea Comptei, B. 2301, 2363. Thorsch, pp. 26, 28, 32, 34. Kervyn 
de Lettenhove, S3ot. polit. U, 430. 

' Augeburger Stadtorchiv, Litterolim, 1646; Thoweh, p. 42. Tumbull, Calendar 
Queen Mary, No. 761. Kervyn, I, 174, H, 240. 

1 Thorsch, p. 41. There are some documents as to his bankruptcy in the Auga- 

i, pp. 34, 40, 42. 
* Augsburger Stadtarchiv. and Gennanisohes Museum. 


Antwerp; but not till 1531 does Sebastian Ligsalz appear as taking a 
part, and not on a very considerable scale, in the business of bills of 
exchange between the Court of Brussels and Germany. In 1546 Ludwig 
Ligsalz, in Antwerp, had lent the Fugger 6,544 ft. at interest. In 1549 
Endres Ligsalz, in conjunction with the Haug, participated in the loans 
of the city of Antwerp; in 1554 and 1558 in those of the English Crown; 
and in the latter year also in the French loans. In the period 1553-6 
the Fleckhamer are many times mentioned in connection with the same 
financial transaction. In 1559 they borrowed largely on the Antwerp 
Bourse at 10 per cent., and were even considered solvent in the following 
year, but, like the Ligsalz, they failed soon afterwards. 1 

Two Strassburg business companies, the two largest there, the Prech- 
ter and the Ingold, are mentioned in the period 1543-58 in Antwerp, and 
particularly in Lyons, as often taking part in large financial transac- 
tions. Between 1560-72 the Ingold were declared insolvent. What hap- 
pened to the Prechter we are not told. 2 

Finally, we may mention some Nuremberg houses who began to carry 
on financial transactions after the war of Schmalkalden. Among these 
are, in the first place, the Pomer, the Furtenbach and many others who 
helped King Ferdinand in the years 1547-53. Later the Furtenbach 
transferred their main business to Genoa and participated in the Span- 
ish loans. They are, for example, mentioned in 1630 as creditors of the 
Fugger in Spain. But for the rest these Nuremberg families are not 
mentioned later in connection with financial business. It is otherwise 
with the Harsdorfer, the Fiitterer, the Elmer, the firms of Ambrosy 
Bosch, Hans and Augustin Furnberger, of Caspar and Christopher 
Fischer, Hans Scheuffetin, and many others. They were involved in the 
French loans and seem to have been exhausted by the great losses they 

The Great South German Financiers in Antwerp and Lyons. As we 
have already seen, the South German merchants from early times came 
into connection with Antwerp and Lyons, the two financial centres of 
the world of the sixteenth century, and contributed a great deal to their 
rapid rise. It was no small number of South German merchants who, in 
their young days as agents or on their own account, arrived in the great 
foci of a quite new trading life, where the money that they eagerly 
sought for seemed to be lying in the streets. 

They then permanently remained there, and according to their luck 
and skill attained their end or again went under. Amongst these, for 

1 Lille, B. 2363. Fngger-Archiv, Bilanz von 1546. BZaugsche Handlungs- 
bfioher. Gennaniaohes Museum. TumbuU, Calendar, Qwen Mary, No. Ill, 751, 
843-4. Kervyn, L 326. H, 240-1, 620. 

1 Lille, B. 2436. Ehrenberg, Hans Kleberg, p. 34. Augsburg. Stadtarohiv. and 

instance, was that George Meuting who for a short time played a pro- 
minent part in Antwerp, but early vanished again. About the same time 
in Antwerp we come across the Conrad Imhof who, in 1503, bought a 
house in the Vlamincstrate and is mentioned as owner of a large house 
'opt Clapdorp' in 1527. His daughter Anna married Jaspar Prays, a 
Fleming. The family appears to have subsisted in Antwerp for a long 
time. 1 Many of the Fugger's agents remained on in Antwerp after they 
had become independent. Examples are: Bernhard Stecher, whose des- 
cendants are later repeatedly mentioned in Antwerp; Matthias Oertel; 
and Wolff Haller, of whom we are about to speak. 

Some individuals from among these offshoots of South German mer- 
chant families in Antwerp come into prominence as financiers and specu- 
lators of the first rank. They are some of the most interesting pheno- 
mena of their time, and it is surprising that historians have not long ago 
turned their attention to them to a much larger extent than they have 
done. We want to make up for this neglect. 

Wolff Hatter von Halkrstein. Three generations of the Nuremberg 
family of Haller were in the service of the Hapsburgs. Wolff Haller zum 
Ziegelstein - the father of the man who will chiefly occupy us - was a 

bruck. In his grant of a coat of arms on 1st May, 1510, the Emperor 
declared that at the Court and elsewhere he had been 'useful, true and 
diligent in important offices, and during wars and serious states of 
affairs had served him well with his appreciable service,' and had been 
knighted on the battlefield by the Emperor. His brother Bartholomew 
was also an Imperial counsellor. They belonged to the South German 
patricians, of whom Ma.Timi1ia.Ti availed himself in a way we already 
sufficiently know. 2 

Wolff Haller zum Ziegelstein had a son, who also was named Wolff. 
He is the man whom we have already got to know as the agent of the 
Fugger at Antwerp. He is first mentioned in this capacity in 1519. In 
the previous chapter we saw he earlier and by the orders of the Fugger 
must have performed real services to Charles, the then King of Spain. 
In 1526 he expressed his gratitude for 'his excellent services for a long 
time past, namely, first in this our Kingdom of Spain, when we first took 
possession of it (1517), then in our election as King of the Romans 
(1519), on our coronation as King of the Bx>mans (1520); also in our 
journeys through the Kingdom of England (1522), and in our wars with 
France (1521-6). He furthered our military affairs in Italy and Bur- 
gundy, and in our great and difficult dealings in manifold ways has done 

>Antw. Schoffenbritfe, and Bulletin de la Proprittt, 1888, p. 23. 

1 From a codex in Museum at Brussels, Alt Herkomen, Stand und Wesen dec 


conspicuous work with his body and by lending his property; daily, too, 
here [he has served us] incur Kingdom of Spain and our Imperial Court.' 
The Emperor then took him into his council and service and granted 
him exceptional privileges. 

Wolff Haller had given up his Nuremberg citizenship. In spite of this, 
on the 29th June, 1526, the Emperor appointed him Mayor ('Schult- 
heisser') of Nuremberg for life, and in the document drawn up for the 
purpose he is quite unusually described as 'our Counsellor from his 
youth up.' Three years later he married in Antwerp a daughter of 
Cornelius von der Logenhagen, the Warden of the Mint there of the 
reigning prince. 1 In 1530 he is again represented in a not very impor- 
tant financial transaction of the Netherlands Government as representa- 
tive of the Fugger; in 1531 as representative of the Paumgartner; and, 
on the other hand, in 1531 as Treasurer of the Queen Maria, Stadtholden 
of the Netherlands, and as 'Chevalier.' But this did not prevent his 
having just then taken a vigorous part, apparently as banker, in the 
financial affairs of the Court of Brussels. 8 

In the family history composed in the Lifetime of Wolf! Haller the 
second, he is described as 'Wolff Haller von Hallerstein, Knight, Coun- 
sellor to his Roman and Imperial Majesty and steward to the Queen 
Maria of Hungary.' How highly she thought of liiin is shown by the 
fact that she stood godmother to his first child, with the Duchess of 
Milan, the Countess of Egmont, the Countess of Zollern, and other ladies 
of the highest aristocracy. He died in Brussels in 1559. 

In the next generation there again was a Wolff Haller von Hallerstein, 
who is mentioned as Keeper of the Privy Purse (Pf ennigmeister) of the 
Emperor in his financial affairs; and in 1557 he was appointed by King 
Philipp II to be Netherlands War Commissioner at a salary of 400 
thalers. 3 It seems that in this office he was the successor of his uncle, 
Euprecht or Robert Haller von Hallerstein, a son of Bartholomew 
Haller zum Ziegelstein. This Buprecht had also settled in Antwerp; 
there he married a daughter of Lazarus Tucher and died Netherlands 
War Commissary. The family then continued on in the Netherlands. 

In these Haller we must perceive the successors of those South 
German patricians who entered the financial service of the Emperor 
Maximilian. Only these had chiefly served the Emperor in Tyrol, while 
the later Haller transferred the theatre of their industrial activity to 
Antwerp, which put them on quite a different pedestal But it seems 
that even there they always remained officials and courtiers rather than 

1 Antwerpener SchofferibwAer, 6/9, 1524. 

Lille, Chambre des Camples, B. 2357 and 2363. Brussels, CJiambre des Comptet, 

Kramichiv Nteiberg: Manuals der Barren Etiern, 1551. Wednesday after 
Christmas. Royal Archives. Brussels, Urk. v. 5/2, 1557. 


bankers and merchants. If this is so they form a contrast to the remark- 
able man whom we must now get to know. 

Lazarus Tucker. Lazarus Tucher was a contemporary of Wolff Haller 
von Hallerstein (both were born in 1492). Outwardly the course of life 
of these two men exhibit many similar features, but when regarded more 
closely the essential differences come to light. 

Lazarus Tucher did not spring from that widespread Nuremberg 
family of Tucher who took such an important position both in public life 
and in the business of their native town. Three generations earlier this 
'Hans line' had separated from the 'Endres line' to which Lazarus be- 
longed. Berthold Tucher, the father of Lazarus, went to Eisleben, where 
he ran smelting works and a copper refinery. At first he made a good 
living out of it, but later he had 'to suffer many adversities and sorrows'; 
but it is not clear what these were. He died at Eisleben in 1519. i 

Berthold Tucker had no less than twenty-two children. In addition to 
Lazarus we hear of: Erasmus, who traded with his uncle to Geneva, 
settled there and died in 1525; Endres, who in 1512, aged fourteen, came 
to the Netherlands, travelled for the Herwart to Portugal and 'the 
newly-discovered islands' (he justified the highest hopes, but he too 
died young): Bartholomew, Hans and Franz - all three similarly went 
to the Netherlands to try their luck there. The first two seems to have 
got on tolerably well, while Franz, as we shall see later, came to grief. 
We observe in this how strongly the young South Germans of that time 
were attracted to foreign parts. 

Lazarus Tucher was the eldest of the brothers we have mentioned. 
He studied three years in Leipzig, but then went to the Netherlands, 
and, as the family chronicler informs us, 'sought the fortune which he got 
rather in old age than in youth.' In 1518 (23rd August) we come across 
him in the Antwerp Sheriff's books as 'Lazarus Tucher, merchant from 
Nuremberg, now living at Doernich (Toumay).' At that time he gave a 
full power of attorney to a merchant named Wolfgang Bucher, who 
came from Leipzig, to get in his book debts, sue, etc. In Toumay he, in 
1520, married Jacobina Cocquiel, daughter of the respected merchant 
Nicolas Cocquiel, some of whose sons removed to Antwerp and there 
acquired a considerable position in the trading world. 8 

Lazarus Tucher, too, was only temporarily domiciled in Toumay. 
Antwerp was the proper field of his activity. He is first mentioned there 
in 1519. 8 On 17th June, 1519, Jan de Fontayne, a merchant from 
Toumay, made over to him a house in the Predikeerenstrate; but a year 

1 Genealogy of the Tucher family, Brit. Mus. Add. MSS, No. 19475. 
P. A. du Chastel, Notices gen&ralogiques Tmirnamennes, I, 536 fl. 
'Christof Scheuerls Srieflnteh, published by Sodea and Knaake, H, 93. Also 
The Antwerpener Sohoffenbuoher. 


later he transferred it again to Jan Berthout, a merchant from Atrecht. 
On 6th February, 1524, the Herwart's agent made over to him another 
house in the same street, which he resold on the same day. So at that 
time he appears to have been speculating in real property. His chief 
business till 1528, however, is of a completely modern type. He was 
broker, agent and speculator in some great articles of speculation like 
pepper and woad. Thus he comes before us in the Tucher business 
correspondence of the year 1526. 

At that time the Antwerp agent of his Nuremberg cousin asked him if 
the Government had the design of putting a new tax on kinds of money 
in circulation. Lazarus Tucher said yes, and then had a long conversa- 
tion with the agent. Just at the end he used an expression by means of 
which he apparently wanted the agent and Ms principal to 'bear' woad, 
of which they had bought a large quantity as a speculation. The agent 
informs his house of this and adds, 'I do not know whether he is in 
earnest or joking. He has often played such tricks and is often himself 
broker, buyer and seller all together.' 

Soon afterwards: 'Lazarus Tucher has almost all the pepper in his 
hands, if one goes to some one who has it to sell, he refers one to 
Lazarus Tucher. For he is both seller and broker together. I have more 
than once said to him in a friendly way that he might think of me if 
anything should come to his hands. All the time he professes himself 
very ready to do this, and that if he could serve you and anything 
should come to his hands, you should have the preference. But I put no 
reliance on him; for I well know that he must be submissive to the 
Hochstetter, Manlich and Bartholomew Welser.' 

In 1528 Lazarus Tucher first began his financial transactions. We 
learnt to know accurately the occasion in which this first occurred, when 
we spoke of the fall of the Hochstetter. He built his fortunes on the 
ruins of this mighty house. In that great financial transaction of the 
year 1528, in which he used his ability unscrupulously, he not only 
acquired a great deal of money and raised his credit in the business 
world, which always judges by results, but in particular he knew how to 
impress the Netherlands Government and to get into such good favour 
with them that afterwards, for a long space of time, he remained their 
most important financial agent. 

We have already heard what an agent of the Tucher reported about 
the business position of Lazarus Tucher shortly after the events of 1528, 
which we have related. Here we may quote from these letters a few 
more passages relating to the inwardness of his business methods and 
his private life. At that time a young Tucher was to be apprenticed to 
a merchant at Antwerp. The agent advised against choosing Lazarus 
Tucher: 'With him he will have to consider for himself what he ought to 

learn. For he [Lazarus Tucher] pays no attention, is seldom at home, 
and has not eaten ten meals at home in the course of a year. Hierony- 
mus Tucher (of the main branch of the house) keeps the books, his son- 
in-law (presumably Charles Cocquiel) is cashier: he looks after both of 

In 1529 Lazarus Tucher bought the house of Marcus van Kerken (at 
the corner of the present Rue de l'Empereur and Rue tie rAmmann) 
for l,540fl. He wanted to pay at once in cash. But the vendor, in 
accordance with the Antwerp custom, only wished to have a third or 
a quarter in cash and to leave the rest at interest until his children 
came of age. 1 Lazarus Tucher's son sold this again, and kept till his 
death a house he bought in 1534, which similarly was situated in the 
present Rue Ammann. In addition, he owned an estate called Gallifort 
near Antwerp. 

Lazarus Tucher, in 1529, as successor of Pieter van der Straten, as 
well as additional to Gerard Stercke, was the chief agent of the Brussels 
Court for the great loans which they were always raising on the Antwerp 
Bourse. Since 1531 he maintained for ten years the first position in this 
department of business; he had then to give it over to the Florentine, 
Gaspar Ducci. Yet till 1552 he had many business relations with the 
Government. In particular, he knew how to utilize the capital of the 
South German merchants for the monetary needs of the Netherlands 
Court, which again, by this means, served the policy of the Emperor. Up 
to 1529 only individuals of the largest South German houses had par- 
ticipated in these profitable but risky financial transactions. After that 
they were more and more drawn in, which, as we saw, finally resulted in 
the ruin of many of the first families. The critical period of this traffic 
did not begin till Lazarus Tucher had ceased his business activities. 
But, in any case, he had contributed much to lead the South German 
trading community on to the fatal path of unsafe business. The details 
of the loans which Lazarus Tucher took up for the Court of Brussels 
we shall get to know later. 

He also did financial business with the city of Antwerp and the King 
of Portugal, but first and foremost with the English Crown. The latter 
transaction we must here follow out in somewhat greater detail, since 
they enable us to get to know somewhat better the character and busi- 
ness principles of Lazarus Tucher. He was among the first of the Ant- 
werp financiers who lent money to the English Crown. Already, by 
1549, a loan of 167,218 Carolus gulden, which Tucher presumably had 
lent to King Edward VI shortly after he ascended the throne, was 
due for repayment. 

iT^erwherHandluwMefvomZSth June J52d,uidThy B , la Prvpriete, 
1889, p. 31. 


William Dansell, the English financial agent at Antwerp at that time, 
was instructed to obtain a prolongation of the loan at 12 per cent.; but 
Tucher would not agree. Dansell then had to borrow the money to pay 
him from Erasmus Schetz, another important merchant of Antwerp. 
Only when this had been accomplished Tucher professed himself ready 
to make a fresh advance, but refused to co-operate in the export of coin 
to England, which was forbidden by kw. Nevertheless, a loan of 
150,000 Caroms gulden took pkce. Yet Dansell, on account of the way 
in which the money was conveyed to him, had to endure many re- 
proaches from the Government, which over his head got into direct con- 
nection with Lazarus Tucher about a further loan. Tucher was willing 
to grant it at 12 per cent., but he would only pay in goods and be paid 
back in cash, while the English Government conversely wanted to re- 
ceive cash and pay in goods. This appears to have rendered the business 
abortive. 1 

When, then, in 1552, Thomas Gresham was appointed financial agent 
to the English Crown in Antwerp, he immediately got into touch with 
Lazarus Tucher, who lent 10,000 fl. (= 60,000 Carolus gulden) at 14 
per cent. In April, 1553, Gresham wrote home that his friend Lazarus 
Tucher would again advance to the King 200,000 Carolus gulden, which 
was to be considered a very satisfactory thing since the Emperor had to 
pay 16 per cent. But it seems that the business did not come off, since 
King Edward became dangerously ill and died some months afterwards. 
His successor, Mary, withdrew her confidence from Gresham and sent 
Christopher Dauntsey to Antwerp, where, by his clumsiness, he severely 
damaged the credit of the English Crown. At the beginning of Novem- 
ber, 1553, he borrowed from Lazarus Tucher 100,000 Carolus gulden at 
13 per cent, for a year. Tucher further promised to deliver a further 
100,000 within a week, so far as his friends in Germany would not have 
made other dispositions of the money. 

In England people were displeased with this settlement, because the 
rate of interest was considered too high. So Gresham was sent off to 
Antwerp in all haste, with instructions to borrow 50,000 pounds 
( = 300,000 Carolus gulden) at 11 per cent., or the highest 12 per cent. 
Immediately after his arrival Gresham tried to cancel this unprofitable 
business with Lazarus Tucher. It proved to be yet more unfavourable 
for the English Crown, because Tucher declared that he would not pay 
till the end of November, but that interest should run from the begin- 
ning of the month, which raised the rate to 14 per cent. This damaged 
the credit of the English Crown so much that Gresham at first did not 
dare to negotiate about a new loan. Full of vexation he wrote home that 

1 Acts of the Privy Council, H, 310. Turnbull, Calendar, Edward VI, Nos. 139, 
142, 146, 148, 160, 153, 156, 161, 162, 164, 172, 184. 

before Dauntsey's arrival people had obtained money at 12, or even 
at 10 per cent., and the merchants had been glad of it. If, on the other 
hand, Tucher's contract was carried out, it would be difficult to get 
anything under 13-14 per cent. But Lazarus wanted his pound of flesh. 1 

On the 26th November Gresham wrote to the Privy Council: 'This 
daye Lazzerus Tucher came unto me upon the Bourse, and asked 
"whether I had any answere whether his bargayne should take place or 
not." I said to hi that I could only marvell that Dauntsey had offered 
such a rate of interest and that he should have required it. His answer 
was that "a had concludyd a bargaine, and that a looked to have his 
bargin kept; for that a knew that the Counsell had wrytten to the 
Fuggers for money" . . . Further a dyd declare unto me that at the 
fyrst a concludyd with Mr. Daunsey but f or i c m floryns; and that aftyr- 
wards, the said Daunsey came unto him, and requyred and prayed him 
to furnishe hym with i c m more: which a showed me that a had it not of 
his own, but was fayn to take it uppe upon his own credit, to doo the 
Queene service. Which (here writing) was small profitt to the Queene, 
but to his own proffit. For that he tooke it uppe aftyr x per cento, and 
woll make the Queene pay xiii. . . . But according as I have written 
you, if this bargain doo take place of Tucher's, you maye not looke to 
have any monny upon interest under xiij upon the hundred; by the 
reason this matter is so spread abroad, and advices given throughout 
all Cristendom.' 

The last observation was entirely true. Thus, for example, Matthias 
Oertel, the Fugger agent, at once brought this affair to the knowledge of 
his masters, and Anton Fugger answered that 13 per cent, was certainly 
a high rate if the news was true. And in the following year a report of a 
Venetian Ambassador contains the information that the English Crown 
was accustomed to borrow money at over 14 per cent, at Antwerp, and 
that at the moment the Queen owed more than a million. 2 

Gresham now sought to satisfy the obstinate man. He wrote to the 
Council: 'This Lazzerus Tucher is a very extreme man, and very open- 
mouthed. As also, according as I have wrytten you, a hathe dyvers 
partners in the bargayne; and considering the letter that your Lorde- 
shipes have written him, wherein you [ac] knowledge Danssey to be her 
Highness' servant, he doth now ground himself not a littill upon that 
word.' In short, the business had to stand, with the result that when 
Gresham, according to his instructions, wished to borrow more money, 
he was asked for 15 per cent., and when he offered 10-11 per cent, the 

l Turnbun, Calendar, Edward VI, No. 663; Queen Mary, Nos. 69, 73, 74, 77, 
83, 86, 89, 98 fi. Burgon, Life and Times of Sir Thomas Gresham, I, 128-38. 
Flanders Correspondence, State Papers Office. 

1 Brown, Calendar T, 661. 


merchants asked him indignantly if he thought they did not know that 
Lazarus Tucher had got 13 per cent, for eleven months, and whether 
their money was not as good as his. 

But in spite of this Gresham remained on friendly terms with Tucher. 
In 1558 he advised his Government to honour Tiiro like certain others of 
the foremost financiers with a beautiful golden chain. When two years 
afterwards in Antwerp a monk preached very disrespectfully against 
Queen Elizabeth and for it was threatened by the English merchants he 
begged Lazarus Tucher to obtain the Queen's forgiveness through Gres- 
ham. Also Tucher repeatedly lent money to the English Crown -in 
1558 11,000 fl. at 14 per cent., and further sums in the same year; in 
1560 again 26,666* . Even the heirs of Lazarus Tucher had in 1564 to 
claim some thousands of pounds from Queen Elizabeth. Gresham, who 
at that time was extremely short of money, was in serious danger of 
having to go to a debtors' prison for this trifle. He only escaped this 
fate by quickly getting sureties. 1 

We possess letters from the last years of Lazarus Tucher which he 
addressed to Lienard Tucher, his cousin, of the Nuremberg main branch, 
who is already known to us. It was in 1561. The great credit crisis 
which irrevocably destroyed the prosperity of the South German busi- 
ness community had already broken out. The two old men, so dis- 
similar from every point of view, exchanged their experiences and busi- 
ness principles. Lazarus Tucher chiefly complained of his brother 
Franz. He had lived badly and had been beguiled by Wolff Poschinger 
(a financial agent of South German origin who will occupy us later) to 
take bonds of the Netherlands Eeceivers General. Lazarus, who knew 
well how unsafe this paper was, helped his brother in 1555 to divest him- 
self of them again. But Franz Tucher did not give up his light-minded 
business habits, and had to suspend payment in 1560 or 1561, where- 
upon Lazarus satisfied the creditors. 

So then Lazarus asseverated that as, thank God, he needed no more, 
he would have nothing more to do with a high rate of interest, which 
usually was accompanied with great risk, but chiefly would aim at 
security to bequeath to his descendants what God had bestowed on him 
through his work. Except a small amount of bonds of the Receivers 
General he had outstanding only a claim of 40,000 ducats on the King of 
Portugal; yet, according to the latest news, affairs in India were again 
quiet, so that he hoped in the course of time to get out without loss. 
'And in truth you will find that next to the English, which is small, this 
Portuguese debt will be paid before those of all the other potentates. I 
wish from my heart that anyone who is involved with the Kings of Spain 

1 Burgon, I, 200, 260. Turnbull, Calendar, Queen Mary, No. 755. Kewyn de 
Lettenhore, Relat. polit. I, 316, 326; II, 240-1; III,. 609 ft 

and Ranee should not have a harder bed to lie on than you or I. At 
times it is not possible to avoid serving the great. I, in particular, as an 
old Courtier, as I two days ago have had to lend my gracious master, 
the Prince of Orange, at his repeated pressing solicitation, 15,000 fl. for 
his marriage with the daughter of Duke Maurice. I desire now neither 
much nor little interest, in order in this way to obtain more easily the 
repayment of the capital. But I would rather have been free from it 
altogether. For my efforts now are directed to get away from all Poten- 
tates and Lords and to put out my money so that I can have it back 
again when I want it, as the present hard times, my age and my infirmi- 
ties require it. I strive now more than I did before to obtain a quiet 
time for the rest of my life, and I, especially in summer, live at my house 
Gallifort, where I am seldom without good company.' If only all the 
South German bankers had acted like Lazarus Tucher in his old age it 
would have been better for them and the welfare of Germany. 

Two years later Lazarus Tucher died. During the great days of the 
Antwerp Bourse he was unquestionably one of the most conspicuous and 
interesting phenomena which then attracted the notice of the whole 
world. He was a type of business man of such a modern character that 
history must consider him as one of the fathers of modern Stock Ex- 
change methods. Although the Emperor made him a counsellor, and 
although he was highly regarded at the Court of Brussels and by many 
other princes, yet, in contrast to Wolff Haller von Hallerstein, he re- 
mained his whole lifelong primarily a man of business. His descendants 
became extinct at the beginning of the eighteenth century, but only 
after they had intermarried with many of the foremost noble families 
of the Netherlands. 

Other Antwerp Financiers of South German Origin. Wolff Poschinger 
appears to have been a feeble copy of Lazarus Tucher. Unfortunately, 
we know little about him. 1 He is first mentionedin Antwerp in 1532, and 
since he then was aged twenty-eight he cannot have carried on business 
on his own account very much earlier. In 1549-55 he is several times 
mentioned as financial agent of the Court of Brussels, and one of those 
through whom the South German trading houses conducted their invest- 
ments of capital in Antwerp. He died in 1558. His son of the same name 
is mentioned in 1560 in connection with similar transactions, while a 
daughter married Paul Tucher (a nephew of Lazarus) and brought to 
him her father's fine house in the Rue Haute. 

A similar, only probably a less conspicuous, part was played in Ant- 

*Alao written: Boschinger, Pusohinger, Putschinger. Of. German. Museum, 
Behaim Corresp. 1649, June; Tuchersches Familien-Arehiv, Brief von Laearua 
Tucher, 1561, 14/3; Haugsches Handlungsbuch v. 1549; Briisseler Staatsarchiv, 
Chambre des Omptes, No. 23470. 


werp about 1543-9 by a man called Kaltenhofer, who from his name 
may have been a South German, but possibly a Netherlander - especi- 
ally as his Christian name was Eustache. 1 

Horns Kleberg, 'the good German' of Lyons. We now come to a man 
who, next to Lazarus Tucher, is unquestionably to be regarded as the 
most remarkable figure in the large circle of German financiers of the 
sixteenth century. 8 Hans Kleberg came from a bourgeois Nuremberg 
family, Scheuhenpflug, a member of which many generations before had 
fled from the town after an unusually scandalous bankruptcy. Hans 
Kleberg's father appears then to have adopted a new name. His son 
was early active in the trading house of the Imhof , and especially in 
Lyons, where he presumably some time before 1525 established a busi- 
ness of his own, which he soon brought into a flourishing condition. At 
the same time he remained in friendly relations with the Imhof. We 
know further that by 1521 he had become a citizen of the town of Berne, 
so that as a Swiss he could, without molestation, carry on his affairs in 
Germany and France during the wars then breaking out between 
Charles V and Francis I. Many other South German merchants did the 
same. But Kleberg did more; he performed political and financial ser- 
vices for the French Government. In 1524 he is accused of having de- 
nounced to the authorities at Lyons two men who had letters on them to 
the Imperial commanding officers in Spain, so that they were arrested 
and imprisoned. In 1526 we come across him at the French Court. In 
1527 the town of Berne dunned Francis I to pay a claim of Kleberg's for 
18,187 gold crowns which was in arrear. This was the first really big 
financial transaction which the King concluded with a German mer- 
chant. It is particularly interesting, in the communication of Berne 
Town Council, to find the extraordinary free language which immedi- 
ately recalls the letter written some years earlier with the same purpose 
by Jakob Fugger to Charles V. The Council goes so far as to threaten 
that if he is not paid Kleberg will call high personages to his assistance! 

In 1528, after many years of vain efforts, Kleberg succeeded in bring- 
ing home as his wife Felicitas, the daughter of Wfflibald Krkheimer, a 
patrician of Nuremberg. But the marriage turned out unfortunate. 
Kleberg had to promise before the marriage that he would settle in 
Nuremberg. But he could not keep his promise because his business 
affairs required that he should permanently be in Lyons. But his wife 
refused to follow him there. His father-in-law, Willibald Krkheimer, 
took the side of his daughter, and tried unsuccessfully to prevent the 
Council from absolving Kleberg from his duties as a citizen. Whereupon 

1 Lille, B. 2436. German. Museum, Behaim Corresp. 1649, June. 
'Prom Ehrenberg, Hans Eleberg, <der gute Deutsche' (Mitth. d. Ver. f. 


. f. Gesck. 


Felicitas got ill and died in 1530, after a long illness. This caused Pirk- 
heimer, who all along had been set against Kleberg, to make the mon- 
strous accusation that his daughter had been poisoned by her husband. 
We possess, however, the statement of impartial persons, from which we 
learn with certainty that Pirkheimer's complaints were at least im- 
measurably exaggerated. 

In general, Kleberg was much hated by the good families of Nurem- 
berg. Kleberg was proud, perhaps, of his money, as the spiteful Pirk- 
heimer thought, but certainly also of his great gifts, by the help of which 
he had become, not merely rich, but also much looked up to in Lyons. 
The great charitableness which he displayed there earned for him the 
name of 'the good German.' In Berne and Geneva, too, he equally 
enjoyed general esteem. But the members of the great Nuremberg 
f amUies with whom he had daily intercourse in business and commerce 
did not cease to regard him with aversion. They did not forgive one 
of their despised plebeians for rising above their heads, and Kleberg, 
who in Lyons showed himself as a homely man, averse from all 
external marks of respect, turned his pride to his countrymen. The man 
who did a kindness to an opponent in Geneva and added, 'I will be his 
servant and friend whether he likes it or not,' never forgot till the end of 
his life the injuries of his countrymen. 

In the last period of Kleberg's life we have more information about 
his business activities. In 1536 he had obtained French naturalisation 
from the King; then in 1543 was appointed 'Valet de Chambre Ordinaire 
du roi' - a title which, in any case, shows that he had been of real service 
to the King. He at once brought several seignorial properties, in respect 
of which the King permitted him to exercise jurisdiction. By this Kle- 
berg had become a member of the French nobility, as so is repeatedly 
described as 'noble homme.' Certainly the services by means of which 
he had climbed to this height were of an essentially financial kind, for 
the tale that he rescued the King's life at the battle of Pavia is unques- 
tionably a legend. 

Kleberg at Lyons achieved what Lazarus Tucher succeeded in doing 
at Antwerp. He succeeded in utilizing the capital of the South German 
merchants for the abundant loans to the King. Probably this first 
occurred in 1543, but especially in 1545. Then the first South German 
houses which had branches in Lyons were induced by Kleberg and the 
high rate of interest promised by the King of France to participate with 
50,000 crowns in the loan raised at Lyons. As well as promises, energetic 
threats must certainly have been used at that time to produce this 
result. Kleberg played with his fellow-countrymen like a cat with a 
mouse. At times he was useful to them and said 'he would leave his 
body and goods with the Germans.' Then, again, when a new higher tax 


was imposed on them he declared 'He could help them with fifty words, 
but he wouldn't do so,' and they then came together to beg for his help, 
he treated them hardly, complained of their ingratitude and asked 
'whether they did not at home regard him as a needlemaker or a copper- 
smith?' And even .added that 'He wished to be a Frenchman here and 
not to assist Germans any more, unless they should also be useful to 

On this basis an understanding was arrived at. The South German 
merchants fell into the trap, and Kleberg had, in addition, got the per- 
sonal satisfaction that the proud families of Nuremberg had to humble 
themselves before him. Only the Tucher and the Imhof kept away from 
the French loans. 

We cannot here tell all which more recent researches have brought to 
light about this remarkable man. We will only touch on a few particu- 
larly interesting facts. 

When the war of Schmalkalden broke out the Evangelicals at first 
thought of Kleberg, in order by his agency to procure in Lyons the 
monetary resources they were pressingly in need of. To this end Jakob 
Sturm travelled from Strasburg to Lyons, but to his consternation he 
found Kleberg seriously ill and had to go off again without having 
effected his object. 

Soon after Hans Kleberg died, leaving behind him a great fortune, 
which his heirs seem to have lost again in a short time, in spite of the 
fact that Kleberg personally had lent only a little money to the King, 
so that at his death his fortune consisted for the most part of cash, and 
in spite of the fact that his widow (Kleberg had married again in 
Lyons) had invested it in real estate in accordance with the provisions of 
his will. 

There stands in Lyons an old statue which has been renewed in the 
nineteenth century. Immemorial tradition alleges that it had been 
erected by the people of Lyons to the 'good German.' Whether the 
Tockman,' as the statue is popularly called from its rocky surround- 
ings, was in fact originally dedicated to Kleberg (as is the case since the 
renovation in 1849), the materials we have at present do not enable us 
to determine. But it is sure that the 'good German' lived on in the 
remembrance of the people, and meanwhile that tradition may be con- 
sidered as worthy of credence until it is conclusively disproved. 

An accurate analysis of the characteristics of Kleberg, so far as the 
unfortunately limited material allows us, reveals that in almost all 
points this remarkable man had a double nature. It is characteristic 
that his good quali ties as a whole are turned towards foreign parts, while 
regarded from his native land the Janus head of Kleberg exhibits only 
hostile, distorted features. 

Later Lyonese Financiers of South German Origin. Hans Kleberg has 
only a, few friends among the Germans at Lyons. As such are mentioned: 
Christopher Ebner from Nuremberg, Christopher Freihamer from Augs- 
burg, Jacob Jager and George Weikman from Ulm. The first three were 
the only German witnesses present when Kleberg's will was drawn up, 
and they are remembered in it. After Kleberg's death George Weikman 
with some other German merchants were considered by the Schmal- 
kaldian League for making arrangements for procuring money for the 
League at Lyons. All of them took part in the loans to the King of 
France - Weikman and Freihamer in considerable amounts. Also they 
all permanently remained in Lyons. We know that Christopher Ebner 
died there in 1559. But apparently none of them took a leading part in 
the relations of the South German merchants to the French Crown and 
its financial affairs. It is only more than a decade after Kleberg's death 
that some moving spirits arose among the South German merchants 
carrying on business in Lyons: they are George Obrecht and Israel 
Minckel, both of Strasburg. 

George Obrecht is mentioned in 1544 in the Tucher business letters 
from Lyons. At that time there was a threat of taking away the safe 
conduct from the German merchants there in order to make them 
accommodating for the loans of the French Crown. Obrecht was sent by 
the Germans to Paris to obtain the continuance of the safe conduct 
But he was unsuccessful; he rather made the affair worse into the bar- 
gain by his indiscreet handling of it. Finally Kleberg, who himself very 
likely had done an ill turn to the German, again smoothed things out. 
In 1555 we again find Obrecht in Paris, whence he communicates to the 
Nuremberg Council information about the stay of the Margrave Al- 
brecht Alcibiades. 1 He no doubt had had something to do at the French 
Court. After 1556 he and his countryman Israel Minckel appear as 
recognized leaders of the South Germans in their financial relations with 
the French Crown. Minckel, who, in spite of his fore name, was not 
a Jew, is mentioned in 1561 as Master of the Mint, and a member of the 
old Corporation of Companions of the Mint. 8 He was also a man whose 
calling -as the Mint was then organized - was very near that of a 
banker. Obrecht, meanwhile, probably had traded at home and did not 
get into touch with financial affairs until he had come to Lyons. 

The details of the big affairs which Obrecht and Minckel carried on 
in the years 1556-64 for the South German merchants with the French 
Crown we shall get to know later, and shall then see how tragically these 

'Behaim Correspondence in German. Museum. Of. Brown, Calendar VI, 
764; Clerjon, Hisfoire de Lyon, VI, 10; Lettres de Catherine de Medicis, ed. de la 
Ferriere, 1, 285, 349, also section, 2, chap. 2. 



affairs ended. The two men by their activities inflicted unspeakable 
harm on the well-being of the South German towns. For the immense 
sums that then migrated to France were for the most part never repaid. 
We are told nothing of the further fate of Obrecht and Minckel. At any 
rate, their part was played out with the year 1565. 

At this time Lyons was in rapid decay, from which it did not recover 
till much later, when the wars of religion were over. Tet many mer- 
chants kept on their businesses there during the -confusion. Among 
these were those relatives of the old patrician family Herwart, who we 
already know had settled in Lyons. Our recital of the South German 
financiers will end with these, the last, who are demonstrably offshoots 
of this family. 

We know that two of the sons of the Augsburg Burgomaster George 
Herwart died in Lyons, and that one of them left descendants there. 
We have also indicated that two grandsons of this Ulrich Herwart later 
played a prominent part. They are the brothers Bartholomew and 
Johann Heinrich Herwart. 1 

These two brothers, of whom Bartholomew was manifestly the most 
important, were bom at Lyons in 1606 and 1609; and since their father 
was born there they can no longer be considered as Germans. We came 
across them first in 1632, the year in which Gustavus Adolphus died. 
At that time they were closely attached to Bernhard of Weimar and 
supplied him with money which enabled him to take Alsace in 1638. 
When Bernhard diedinthefollowingyear they supplied the money which 
was necessary to induce his army to enter into the service of the French. 

In the following year they appear to have transferred their main 
business to Paris, and after that only to have kept on a branch in Lyons. 
Mazarin, in 1643, recognized their great services to the French state. 
In 1644 their advances made it possible for the King to make the most 
of the victory of Freiberg and take Phillipsburg. The King rewarded 
this by appointing Bartholomew Herwart Intendant of Finance. In 
1649, when the Treasury was so exhausted that they could not pay the 
troops of Turenne's army which threatened to declare itself for the 
Fronde, Herwart, by paying up the arrears of pay, succeeded in alienat- 
ing the troops from the celebrated commander. Mazarin, in the pre- 
sence of the King and the Court, announced that 'Herwart has rescued 
France and preserved the crown for the King. This service shall never 
be forgotten.' 

By the above-mentioned and other similar loans in the Mowing year, 
the Herwart handed over 2| million livres in all, which were by no 

*<% tte'iatereeting article of Freiherr Hans Henrarth von Bittenfeld in der 
Zi**r.<Lhistor. Ver. /. Schwabtn, 1, 184 ff., and Depping, Un btoquier ptotwtant 
eo France au XVH ridofe (Berne AMforijtie, X, 285 ff., XI, 63 fi.). 


means sue to be paid back. Bartholomew risked his life in the re- 
peated negotiations with the seditious troops. For all these services he 
was appointed Controller-General of Finance in 1657, and after that was 
directly under the Surintendant Fouquet, to whom he personally ad- 
vanced large sums of money. 

Like many financiers of the sixteenth and seventeenth centuries these 
Herwarts were both state officials and bankers, which naturally was 
more useful than state finance from the point of view of business re- 

sults. Bartholomew's character, too, does not appear to have been one 
jed him of having, in con- 
junction with Colbert, brought about his (Fouquet's) fall. Colbert him- 

of the best. Later, his friend Fouquet accused him of having 

self, too, thought very little of Herwart, and only used him so long as he 
needed him, namely, till 1665, when he combined Herwart's office with 
his own. 

Bartholomew Herwart died in 1676. He was an intimate friend of La 
Fontaine, who spent his last years in his house. Finally, it is note- 
worthy that he used his high position in the financial administration to 
introduce many Huguenots into it, where they made themselves so 
useful that after the revocation of the Edict of Nantes Colbert saw them 
depart with a heavy heart. Herwart's descendants then emigrated to 

The chief importance of the two Herwarts lies in the fact that they 
were the last offehoots of the South German financial magnates of the 
sixteenth century. When Colbert nationalized French finances the only 
field still remaining for the international princes of finance was finally 
lost, about the time when the tragic remains of the lugger money busi- 
ness were buried in Spain. 

North German Capitalists. Apart from the people of the Netherlands 
proper it was only quite a small number of North Germans who took 
part to any considerable extent in the great international financial 
transactions of the sixteenth century, and among them there is scarcely 
one merchant to be found. On the other hand, we are astonished to 
notice for decades in the front ranks of the Antwerp capitalists the well- 
known names of prominent members of the Holstein nobility; above all, 
of the Bantzau, but also of the BrockdorfE, Ahlefeld, and others. 

The Ranteau at that time were one of the richest German noble 
families. Heinrich Bantzau, in his Genealogia Ranzoviana (which ap- 
peared anonymously in 1585), himself gives us information as to the 
wealth of his family, and adds: 'In our time one of the family has almost 
simultaneously lent many hundred thousand thaler to the Emperor 
Charles V, the Queen of England, the King of Denmark and the towns 
of Antwerp, Ghent, Liibeck, and Hamburg.' Heinrich Bantzau un- 
doubtedly here refers to himself. But not only he, a great statesman, a 


Maecenas and a learned man, and Stockholder of Schleswig and Hoi- 
stein, but his father Johann, the celebrated soldier, his cousin Moritz, 
the bold cavalry leader, and his father-in-law Franz von Halle aus 
Drakenburg und Rintelen-all of them had lent extraordinary large 
sums of money at Antwerp at high rates of interest. We only know a 
part of these Antwerp financial transactions, but that is sufficiently 

In 1550 Johann Rantzau, in conjunction with Franz von Halle, lent 
King Edward VI of England 70,246 Caroms gulden, which were repaid 
in the following year. In September, 1552, Franz von Halle is noted as a 
creditor of the English Crown for 185,560 gulden, and Johann Rantzau 
for 18,559 gulden. Apparently Franz von Halle had permanently taken 
up his quarters in Antwerp. At any rate, he is buried there. 1 

Then we hear for the first time again in 1563 that the English Govern- 
ment owed money to Moritz Rantzau and Faulus Brockdorff. They had 
the same representative in Antwerp, whose name we are unfortunately 
not told. Queen Elizabeth had sent Sir Thomas Gresham to Antwerp to 
obtain a prolongation of her debts which were falling due. Everybody 
agreed except the agent of Rantzau and Brockdorff. He demanded 
his money and threatened that if he did not get it he would exercise 
his right of holding Gresham and other English merchants as security 
and would arrest them. For the security of the city of London, which 
was given with the bonds of the English Crown, included the right 
to do this. 8 

In any case the Holsteiners did not make any loss on their English 
claims. But they did much worse with their claims against the town of 
Antwerp. How these arose the materials that we have do not make 
clear. We only hear that they chiefly served to pay the cost of the forti- 
fications of Antwerp. They date from the 'sixties of the sixteenth cen- 
tury. Originally the rate of interest was 12 per cent. But in 1570 the 
town declared that it was not in a position to pay such a high rate, and 
asked that it should be reduced to 5 per cent. The Holstein creditors 
were very indignant. They were willing at the most to reduce the in- 
terest to 7 per cent, provided that the capital was paid off by seven 
yearly instalments in Hamburg. At last they agreed on 6 per cent., and 
payment off within seven years. The agreement was confirmed by the 
Finance Council of the Netherlands, but nevertheless was not kept. 
The interest was never paid, and ultimately a considerable part of the 
capital was lost. 

Yet, comparatively speaking, the Stadtholder Heinrich Rantzau 

* Ad* of the Privy Council, HI, 408. Nans, Memoirs of BurgKky, p. 405. 
1 Burgon, Life and Times of Sir Thomas Qreshatn, H, 28, 38, 43. Kervyn, TO, 

came off best. It is true that during his life he exerted himself in vain to 
get any payments. In 1581 he requested King Philipp II to allow him to 
attach the burghers of Antwerp and their goods. He repeated this 
request in 1585 in a letter to the Stadtholder Alexander of Parma and 
also threatened the town to take the law into his own hands. At the 
intercession of Parma he kept his patience longer. But in 1592 he wrote 
to the people of Antwerp: 'Not small is the sum which you owe me. For 
if the yearly interest unpaid had been capitalized, the sum exceeds a 
million Carolus gulden; and if some of your obligations stand in other 
people's names, yet they belong to me, my wife and my children.' 

Through the mediation of the King of Denmark Rantzau at last ob- 
tained, at any rate, the promise that the town would use their utmost 
endeavours to recognize his claim. For it appears that they did not 
consider themselves unconditionally obliged to pay it because the debt 
was on account of the Government. At last, in 1596, they formally ad- 
mitted at least 125,000 thaler of the claim. This was only arrived at 
through Rantzau's relations with Brussels. Yet he died two years later 
without having lived to receive the repayment. His heirs had to wait 
many years longer for it. It was not till 1606-16 that at any rate half of 
the 400,000 guldens (which they claimed inclusive of interest) was paid 
out to them. The remaining Holsteiners who were interested appear 
mostly to have got nothing. According to the settlement of 1570 their 
claims amounted in all to 117,000 thaler. 

But that was by no means the whole. For from other sources we 
know of an admitted debt of that time of the town of Antwerp to 
Benedictusvon Ahlefeld which amounted to 43,713 thaler. It appears 
thatultimatelyhalfofitwasclearedupinieOO. Weknowthatinl597the 
heirs of Moritz Rantzau demanded satisfaction both in the Netherlands 
and at the Court of Spain. But there is no trace of their having got it. 
Friedrich Brockdorff, Detlef von Ahlefeld and Melchior and Otto 
Rantzau appear to have taken the law into their own hands and im- 
prisoned some Antwerpers who were travelling through Holstein. But 
it is not clear what they got from this. 1 

The town of Antwerp obtained loans from many other German 
nobles, in particular 400,000 thaler from Count Mansfeld. This was 
through the mediation of Gresham, who for this purpose sent his trusted 
servant Richard Clough to the Count, who had given his word to Queen 
Elizabeth. Further, a Herr von Holzfeld who had a claim of 21,767 fl. 
against the town, succeeded in being partly paid in 1570 by intercepting 

1 CL Anto. StadspratocdOen ed. Pauwds, 1, 341, 346 ff., 368 ft, 370, 386, 422 ft, 
bis 458, in Hambg. Commerzbibliothek 'Copybook of Jurgen Poorter, a clerk of 
Fran Barbara Rantean, widow of Moritz Rantzau; von Berthean in d. Zttchr. 
d. Oat. f. 8ctte8wig-Host.-Laws*bg. CfescMdOe, XXTT (1892), 277 ff. 


some Antwerp merchants on their way to Frankfurt am Main. In the 
following year it is mentioned that the town made some repayments to 
Duke Adolf von Holstein. And in 1572 the town had to defend itself 
in the Imperial Chamber (at Wetzlar) against a claim of Count Johann 
zu Wiedt for 42,000 fl. But it is not certain that the last-mentioned 
claims really were concerned with loans transactions. 1 

Finally we must here shortly allude to a North German noble or 
patrician family, the Bodeck, who were induced to carry on financial 
business through the fact that their kinsmen settled in Antwerp and 
acquired a large fortune there. They came from Prussia, and belonged 
to families of Knights of the Order who had conquered this land. 
Johann von Bodeck lived from 1454 to 1521 in Thorn. His son Bona- 
venturo went over to the Augsburg confession and settled in Antwerp, 
where he had dwelt at least as early as 1554. In 1564 he stood security 
to the town of Antwerp for the Hansa Town in respect of the interest 
in a claim of 40,000 fl. which Antwerp had against them. 8 When the 
disorders broke out in Antwerp he migrated to Frankfurt am Main, and 
died there in 1591. 

*CL Burgon, I, 337 F.; Kervyn de Lettenhove, Mat. dipt, des Pays-Bos, et 
I'Angleterre, II, 270-626. 
' Antw. StadspratocoUen ed. Pauwela, 1, 181. 




ftENERAl Considerations. The fact that the Florentines played 
*-' the chief part in the history of the Renaissance has never yet been 
satisfactorily explained. Venice and Genoa were also rich cities, and no 
one can dispute the many-sidedness of Venetian enterprise. If therefore 
the importance of Venice, not to speak of Genoa, is not to be compared 
with that of Florence, one fact which has not yet been observed in this 
connection was largely responsible for this. The chief strength of the 

trade in commodities, while the Florentines since the thirteenth century 
had gained their riches chiefly as bankers, and this had brought them 
important connections in the Courts and high places of almost the 
whole of Europe; and since their trade required little work from the 
individual it had left them plenty of leisure for higher interests. These 
facts gave a powerful stimulus to their already highly developed 
capacity for culture and to their ambitions. Moreover, since their state 
was so small, that at any rate while it had no port, they could only play 
a leading part in the world through their money, many of the nobler 
spirits among them threw themselves with extraordinary passion into 
the cult of art and science. They managed to combine a munificent 
liberality in these directions and a mode of life of the greatest elegance 
with a certain distinguished simplicity - a fact well brought out by one 
of their best historians, Varchi. 1 Among the great financiers of the six- 
teenth century, the Florentines are the only ones whose chief branch 
of business in the Middle Ages was dealing in large international bills 
and other credit transactions. When economic changes at the close 
of the Middle Ages forced into the background the commerce and 
industry of Florence as in the case of the other Italian cities, the 
Florentines had to turn their inherited faculty for finance to greater 
account than ever; and the greatly increased demand for credit offered 
them abundant opportunity for its exercise. Until late into the second 
half of the fifteenth century the Medici and the families connected with 
them, the Portinari, Sassetti, Tornabuoni, Guidetti and so on played 
the leading part among Florentine bankers, though their aim in the 

v. fiorent. Kb. 9: 'II vitto de' Piorenti 

Iincredibile mondizia e pulitezza.' 
II b, 49. 


case of the Medici at any rate was no longer money, but polifical power. 
Lorenzo the Magnificent no longer carried on trade as an end in itself. 
His agents turned this to account by furthering their own interests at 
his expense, so that the business fell into a dangerous disorder. Other 
families then came to the front, among them those who had been at 
enmity with the Medici and therefore had been banished and deprived 
of political power, and who therefore aimed at getting fresh strength and 
influence through financial dealings abroad. The course of events re- 
stricted their field of operations, but it remained large enough for experi- 
enced business men by means of intensive cultivation to continue to 
reap a rich profit for a long time. 

There were five principal regions where the Florentines during the 
last centuries of the Middle Ages had developed their business as mer- 
chants and bankers on a large scale. These were the Levant, Italy, 
France, the Low Countries, and England. 

The Levant was taken from them by the forward movement of the 
the Turks, but chiefly by the change in the direction of the world's trade. 
Their efforts to make good its loss by bringing in Spain and Portugal 
were not successful. 1 They were able to keep their hold longer over the 
other regions, but the struggle of the Medici for supremacy in the 
Bepublic had as a consequence an ever-growing connection between 
Florentine business and political interests and those of the French 
Crown. This fact forced them on to the side of the Valois in the world 
struggle between the Valois and the Hapsburgs. Finally the Bepublic 
was overthrown by the Medici backed by the Hapsburgs, and this drove 
all their opponents and those who had not yet come to terms with the 
new state of affairs into the French camp. This development was 
fostered by the rise of new powers in the Low Countries, Italy and 
England, who finally drove out the Florentines. In France, on the other 
hand, these either, like the Fugger, never found a firm foothold, or, like 
the Genoese, were gradually forced out by Florentines, or finally, like 
the South German Protestants, came to grief over their own business. 

It come about therefore that of all their business fields, the Floren- 
tines retained only France, which, however, continued for a long time 
to yield them rich and growing profits. 

The Florentines in Rome and Naples. Lists dating from about 1470 of 
the Florentine branches in the different countries have come down to 
us.* These show that at this time there were thirty-two banks in Flor- 
ence itself, and that among them the chief part in large international 
finance was played by the firms of Pier Francesco e Lorenzo de Medici e 

*Cf. Heyd, Genchichte des Levantdkandds, II, 523 fi. 

From the Chronicle of Benedetto Dei and a Ms. in Miiuohener Hof- und 
Staatsbibliothek (ItaL MSS. No. 160). 


Compagni and Jacopo de Pazzi e Sue Nipoti. The most important 
centres of Florentine banking in Italy, apart from Florence itself, were 
Rome and Naples. In Rome at least ten Florentines had important 
business, and forty persons are named as entrusted with the charge of 
them. There were about the same number of Florentines staying in the 
Kingdom of Naples. 1 

In Rome there was little wholesale trade proper, but banking business 
flourished on an extraordinary scale, for it was fed both by the world- 
wide financial system of the Papal Curia and by the streams of foreigners 
who came to Rome in the years of Jubilee and the other feasts of the 
Church, The connection is notorious between these financial trans- 
actions and the distribution of high ecclesiastical office and prefer- 
ment. It came about, therefore, that in one period the Florentines 
played the first part also in the College of Cardinals and generally speak- 
ing in the whole organization of the Curia. 

Among them the Medici had been since the beginning of the fifteenth 
century the chief bankers of the Curia, an influential and profitable 
position which they had managed to retain under a succession of Popes. 
Only when Lorenzo il Magnifico fell out with Pope Sixtus IV the Pope 
transferred his financial business to Francesco de' Pazzi, an action 
which materially helped to inflame the enmity of the two great families. 
The attempt of the Pazzi two years later to overthrow the Medici led to 
their own downfall. This again provoked the war between the Floren- 
tines on the one side and the Pope and King Fernando I of Naples on 
the other, a war which did considerable damage to Florentine business 
in both markets. Under the next Pope, Innocent VIII, Lorenzo de' 
Medici regained his former position. The business connection between 
the Medici and the Curia ceased on the death of both these men, and 
other Tuscan bankers came to the front, notably the Sienese Agostino 
Chigi and the Florentine Bindo Altoviti, the friend of Rafael, Michael 
Angelo and Benvenuto Cellini. The Altoviti had branches in France, 
the Netherlands, and England. We know, however, very little about 

The highest ecclesiastical interests were intimately connected with 
the finances of the Florentines. Rome became the scene where an un- 
paralleled splendour was united with an extreme corruption. It was 
this combination which first struck in Luther's reverent soul the note 
which afterwards resounded so powerfully when he saw the conse- 
quences of the same system on German soil. 

Among the Florentines settled in Naples the Strozzi at this time held 

1 Reumont, Geach. tL Stadt. Son, ILL a, 441 ft ., ILL b, 398 ff.; B. Brown, Calendar 
II, 176; Marino Sanuto Diarii, XVI, 27, 1613. 
1 Reumont, I.e. Pateerini, OeneaJogia delta famiglia AOomti, p. 51 ff., 54 


the chief place. Filippo Strozzi the elder, one of the most noted and 
favourite members of this gifted family, was banished from Florence and 
settled about the middle of the fifteenth century in Naples. There he 
gained a large fortune by business with the King Ferrante, who was 
always in need of money, and with the similarly situated nobility of the 
country. In Borne, Naples and Florence there was then no place where 
money could be more safely deposited than in Strozzi's bank. No 
interest was paid on such deposits, which could, however, be employed 
with caution in active credit operations. Filippo's assistants were 
chiefly members of his own family, as at his table in Naples he was able 
to count more than eighteen Strozzi. He was the founder of the fortunes 
of this branch of the family. 1 Recalled from exile, he spent the end of 
his life in Florence. The Medici honoured, and at times even employed 
him, but did not cease to regard him with suspicion. He built the 
magnificent Palazzo degli Strozzi, and died in 1491 . We shall have more 
to say later of his son, the famous Filippo Strozzi, and his grandson, the 
no less famous French marechal. 

In the first quarter of the sixteenth century the Florentines were still 
the chief financiers both in Home and Naples. The Genoese, the Fugger 
and the Welser ran them closer and closer, but the Florentines still kept 
the lead. It was only taken from them by the Genoese after the sack of 
Borne and the changes which ensued on the political scene. 

The Final Period of the Medici in the Netherlands and England. The 
Florentine branches in Bruges and London had from early days been 
closely connected. As late as 1470 Benedetto Dei says of them: 'They 
rule these lands, having in their hands the lease of the trade in wool and 
alum and all the other State revenues, and from thence they do business 
in exchange with every market in the world, but chiefly with Borne, 
whereby they make great gains.' This statement is rather boastful, but 
we have evidence from other sources as to the continued predominance 
at this time of the Florentine financiers both in England and the 

At first the Medici played far the most important part in the case of 
both countries. Their chief representatives were Tommaso Portinari and 
Tommaso Guidetti. In 1462 they are mentioned as representatives of 
the firm Lorenzo and Giuliano Medici, and by 1468 they must have lent 
large sums both to the King of England and the Duke of Burgundy. 2 
The business they transacted in the following years with both princes 
was,however, more important still. According to Philippe de Commines, 

1 Of. Reumont, Beitr. z. ital. Gesch., V, 223 ff. 

'Pagoini, DeOa Detima, III, 171; Buser, Die Bezidnmffen der Medicaen zu 
Frafe-eic&,437; Olivier, Dela Marche, quoted in Dupont, Memoires de Comyne*, 

n> 337. 


who was well informed on this point, in the year 1471 Charles the Bold 
of Burgundy lent Edward IV of England 50,000 crowns to enable him 
to return and regain his kingdom, which he succeeded in doing. Tom- 
maso Portinari gave security to the Duke for the 50,000 crowns and 
soon after for 80,000 crowns more. Guidetti lent to the King similar 
sums on several occasions during the struggle for supremacy; and 
Edward when he had overcome his opponents rewarded him by the 
grant of valuable trade privileges. The Medici meanwhile had great 
trouble in getting their money back again. 1 The other business which 
Tommaso Portinari did for them in Bruges turned out even worse. 

Tommaso Portinari held a very distinguished position at the Bur- 
gundian Court. This may have made him incautious in granting credit 
to the warlike Charles the Bold and his daughter Maria, who was the 
wife of Maximilian I, the worst payer of all princely debtors. His 
roasters did not, however, fare so badly as the Florentine trading com- 
panies Da Rabatta and Dei Campie in Bruges, who after Maria's death 
in 1482 were ruined as the result of the advances they had made to her. 
The Medici did, however, lose large sums, and as a result apparently, in 
1485, Lorenzo gave up the branch in Bruges 2 and discharged Tom- 
maso Portinari. Portinari thereupon entered the Netherlands service 
altogether and continued to play a huge part in finance, though he was 
also employed in diplomatic missions. 

At this time the Burgundian Hapsburg Court was so deeply in debt 
that a large part of the famous Crown jewels had to be pawned. An 
inventory of the year 1489 puts their value at 801,000 fl. s 

Jewels estimated at the values given below were held in pawn by the 
following persons: 

100,000 fl. by Christoforo Nigsoni of Genoa. 

100,000 fl. by Tommaso Portinari \ 
36,000 fl. by Antonio Gualterotti [ all of Florence. 
12,000 fl. by Antonio Frescobaldi ) 

Others again were held by merchants living in Bruges. 

Tommaso had a costly lily richly set with gems, which 'riche fleur de 
liz' was called by the Italians il Riccho Fiordalisio di Borgogna. It 
weighed 19 Ib. The money lent upon it was to be repaid from the 
Flemish customs on English wool, the Tonlieu of Gravelinghen which 
Portinari had leased in 1485. As this failed to materialize, the jewel 

1 M tmaires de PMippe de Comynes, ed. Dnpont, I, 257, H, 337; Kervyn de 
Lettenhove, LeUres et negotiation* de PMippe de Comines, I, 66; Rymer, Foedera, 

'Qiao Capful, Geschichted. fluent. Bepublik, translated, 129; 
Kenmont, Lorenzo de' Medici U Magnifieo, 2nd ed., II, 302. 

tJakrbtchd. hauthistor. Sammlungen dea wterr. Kaiserhawes, Vienna, 1883. 
Prk., p. xxv. 


found its way to Florence, and after the death of Tommaso Portinari was 
first taken over by his nephews Folcho and Benedetto and then by the 
firm Girolamo Frescobaldi e Gompagni as Portinari's representatives 
in Bruges. In 1498 it came into the hands of Alemanno and Jacopo 
Salviati who deposited it in the Spedale di Santa Maria Nuova in 
Florence. Two years later it was handed over to Antonio by Pier 
Gualterotti and had not been redemeed by 1502. 1 

Folcho Portinari, one of Tommaso's nephews whom we have already 
mentioned, had in 1494 a claim of 3,800 Fl. against the city of Bruges, 
and in 1498 the Frescobaldi took a lease in his name of the Flemish 
customs on English wool which had been leased to his uncle.* 

Tommaso Portinari also did signal service to King Henry VII of 
England. Later his sons Francesco and Guido settled altogether in 
England, where they were treated with special favour by the King. In 
1554 a Portinari is mentioned who had served Henry VIII and Edward 
VI as a military engineer for fortifications. 3 

The last of the Medici mentioned in the Netherlands was Raffaele, who 
was a partner in the Gualterotti firm from 1513 to 1522, but was also a 
Knight of St. James and Imperial Chamberlain. The Guidetti also are 
very often mentioned at this time in connection with finance, but the 
first place had already been taken by other Florentine houses, especially 
the Frescobaldi and the Gualterotti. 

The FrescobaUi and the Gualterotti. At the time when the Medici had 
ceased to count in the business world and the Fugger had not yet 
attained their predominant position, the Frescobaldi and the Gual- 
terotti were the foremost financial powers in Europe, but not for long. 
Their importance rested entirely on their business in the Netherlands 
and England. There is scarcely any mention of it in Florence in 1470, 
when they still had no banks there; while Girolamo Frescobaldi, then 
twenty-six, was carrying on business in Bruges. He is mentioned in 
Bruges down to 1515, but before that date had a branch in Antwerp. 
Here he bought a piece of land and it gradually became the centre of 
gravity of the business. The Gualterotti, who are first named in 1489, 
did the same. In 1518 they had branches both in Bruges and Antwerp. 
Antwerp had been their centre since 1504 for the pepper import 
from Lisbon, organized on a joint basis, and they had shared in the 
expeditions of German and Italian business houses to the East 

1 Pagnini, Delia Deeimi, in, 294; Gachard, Supports sur lea archives de LiOe, 
p. 69 fl.; Archives de Lille, chambre des camptes, B. 2152, 2160, 2163; Ulmann, 
Kaiser Maximilian I, 845 ff. (Brit. Mus. Add. Charters 1262, Brewer, Calendar 
17, No. 6227 ff.) 

Gilliodte van Severen, Invent, des Archives de Bruges, VI, 386; Gaohard, 
Rapport sur les Archives de Lille, p. 70. 

Brewer, Calendar 1, 5434; IV, 2171. Turnbull, Calendar, Queen Mary, No. 196. 


Indies. 1 Pure finance, however, occupied them more and more. Here 
Girolamo Frescobaldi and Filippo Gualterotti were the traders, but 
we meet many other names. 

We have seen that in 1489 the Frescobaldi and the Gualterotti had 
lent large sums to the Burgundian Court, and that these had remained 
outstanding many years. Girolamo, or, as he was mostly called in the 
Netherlands and England, Jer6me Frescobaldi, had in 1494 a claim on 
the city of Bruges for 5,800 FL, the largest claim of any individual 
with the exception of the agent of the King of Portugal. 

In 1498, as we have seen, the Frescobaldi, representing Folcho 
Portinari, leased the Gravelinghen customs. From this time onwards 
they were in constant relations with the Netherlands finance administra- 
tion; but the amounts of the transactions were usually small. 2 The 
Frescobaldi's business with the English Government began soon after 
the accession of Henry VIII, who lent large sums from the treasure 
accumulated by his father to Florentine merchants in order to develop 
their trade with England. The Frescobaldi as well as Guido Portinari 
and Giovanni Cavalcanti were among these favoured Florentines. 
They in their turn furnished the King with munitions and commodities 
and managed his payments abroad." 

In the beginning of 1516 the Frescobaldi enjoyed the confidence of 
the English Crown to such an extent that the King employed them to 
act as his agents in paying large subsidies to the Emperor Maximilian, 
though Bernhard Stecher, the Fugger's Antwerp agent, had previously 
pointed out to the English agents that the Frescobaldi were hardly in a 
position to carry out the transaction. This in fact turned out to be the 
case. The Florentines were unable to convey the money in time to 
Northern Italy, where the Emperor and his army then were; and 
Maximilian, as we have seen, was therefore forced to make an inglorious 
retreat. The Frescobaldi were accused of having been bribed by France. 
The reg and Wolsey were extremely angry, while every one else be- 
lieved that their delay had been due to secret instructions from the 
English King. In reality they had neither the means nor business con- 
nections in South Germany sufficient for such a transaction. Finally 
they had to borrow from the Fugger under the guarantee of the English 
Ambassador the sum of 60,000 fl. in order to relieve the Emperor's most 
pressing needs. 4 The inner weakness of the firm which became evident 
at this juncture led to its downfall two years later. The Frescobaldi 

1 Heyd, GesMMe d. Levantehandde, U, 523 ft. (French edition. II, 630 ff.). 

"Lille, B. 2173, 2177, 2210, 2224, etc. 

Brewer, Calendar 1, 922-3, 1413, 3410, 3496, 4068, etc.; Brown, Calendar II, 

Of. Brewer, H, Nos. 1384, 1475, 1736, 1792, 1816, 1928, 1937,;i968,2023, 2034, 
2153, 2113, 2166, 2230. Brown, H, 722, 730. 


and the Cavallari from Lucca, who were closely connected with them in 
business, owed King Henry VIII the sum - enormous for those days - 
of 60,000, part of which was to be repaid in alum and salpetre, while 
the rest was to be kept at the King's disposal at any time. In the year 
1517 a new agreement was concluded between the King and his debtors 
under which the debt was to be repaid in yearly instalments. In the 
following year, however, they were unable to pay the instalment. 1 
Either from this cause or because the Frescobaldi had lost their credit 
for other reasons, the firm went bankrupt in May and June, 1518. 
Their Antwerp property had to be put up to auction and a composition 
was made with their creditors. In 1532 among the arrears due to the 
English Crown the claims on Filippo Frescobaldi and Antonio Caval- 
lari were regarded as hopeless, and the Fugger too in 1527 wrote oft their 
claim on Lionardo Frescobaldi e Fratelli as a bad debt. The total 
liabilities in 1518 were estimated at 300,000 ducats. 2 

In June, 1518, when the fall of the house was already inevitable, 
Cardinal Campeggio besought Wolsey to shield the Frescobaldi. The 
fact that a composition was reached shows that Wolsey did so. When, 
however, Leonardo Frescobaldi died, about 1529, Wolsey transferred 
the Frescobaldi' s acknowledgments of indebtedness to third parties, 
who tried to obtain payment from the surviving members of the 
young Francesco, Leonardo's brother then asked Wolsey to continue 
the protection which had helped his father and brother. 8 Whether this 
request was granted we do not know. The Italian writer Bandello, who 
on his travels stayed in London, tells a tale of Francesco which if true 
- and Bandello is fairly reliable in such stories of his own time - sheds 
a friendly light on his further history. 

According to this story Francesco, after living a long time in London, 
had returned to Florence.* Here he befriended a young Englishman 
who on his travels came to Florence in need of help. This was Cromwell, 
Wolsey's secretary and eventual successor. Frescobaldi meanwhile had 
been ruined and had nothing but a few doubtful arrears, among them 
15,000 ducats in England. In order to collect these he went to London, 
where Cromwell, recognizing him in the street, took him home and gave 
him friendly entertainment. Cromwell helped him to make good his 
claims and offered him a large sum to found a new bank. Frescobaldi, 
however, wanted quiet and went back to Florence, where he died. 

The house of Gualterotti lasted rather longer. It is mentioned in the 
Netherlands financial transactions till 1519, when they held a share of 

1 Brewer, Nos. 2963, 4004. Nos. 3098, 3141, 3491. Brown, H, 443. 
1 Marino Sanuto, Diarii, XXV, 427. 
Brewer, Calendar IV, 6974-6. 
< Brewer, No. 2963 (No. 6974-6). 


55,000 fl. in the large loans which Charles raised for his election as 
Emperor. They, however, probably lost heavily over the Frescobaldi, 
with whom they had business connections, or else political conditions 
told against their business in Antwerp. Anyhow, after the death of 
Filippo Gualterotti, who was the soul of his business, his son Francesco 
resolved to wind it up. He employed for this purpose Benedetto 
Gualterotti, who continued to be spoken of in Antwerp till 1529. 1 

End of the Florentines' financial Transactions in the NeOierlands and 
England. With the Gualterotti the last Florentine banking house of 
importance disappeared from the Netherlands. Gaspar Ducci, though 
mostly called a Florentine, really came from Kstoja, and in any case 
did not belong to the firms we are now discussing. 

There were, however, even in later times, a considerable number of 
Florentine merchants in Antwerp, and they in 1546 were even granted a 
new privilege. Even those among them who, like Cavalcanti, were of 
some importance in England, were of very little account in Antwerp 
business. 2 The chief reason for this is probably that the business situa- 
tion of the Florentine banking houses was increasingly embarrassed by 
their connection with the policy and finances of the French Crown. 
Here we have the counterpart of the relations of the Fugger and the 
Genoese in regard to Lyons. The financiers who had thrown in their 
lot with one of the parties contending for the mastery in Europe, could 
no longer hold out in the chief financial centre of the opposite party. 

The development in England was quite different. Here Giovanni, 
Bernardo, andlater Tommaso Cavalcanti, throughoutthe reign of Henry 
VIII held the first place in finance after the Bonvisi of Lucca. Tommaso 
Cavalcanti in 1544 was a chief creditor of the King, who for some years 
then had been unable to lend broadcast in his early manner and was 
forced to get more and more into debt. In order to do this he made use 
at first of the Italian merchants resident in London. Shortly before his 
death, however, the English Government learnt that they could borrow 
to better advantage in Antwerp, and this became the regular method 
under Henry's successors. The services of the Florentines were there- 
fore no longer necessary. Tommaso Cavalcanti was, however, still in 
business in London in 1556, but he had no further connections with the 
finances of the Crown. The last remnants of their trade in England was 
soon taken from the Florentines by the English merchants. The 
descendants of the old Florentine merchant families still spoken of in 
England under Elizabeth had taken to other professions. 3 

1 CL Lille, B. 2177, 2210, 2218, 2224, 2286; Gaohard, Rapports sur lea Archive* 
de LiUe, p. 70; Antioerpener Schoffenbriefe, 1525, 27/7- 

Priv. of 1646 in the Liate dea Edits de Charles V, p. 295. 

Of. Brewer, Calendar I, Nos. 1089, 3426, 3466, 3496, 3746, 6030 u. B. 1; Green, 
Calendar Add., 1647-65, p. 436. 


The Florentines in France. The Florentines' connection with. France 
had lasted for some centuries before the opening of our present period. 
In early times it had been entirely an economic connection. The 
Florentines, in their capacity as merchants and bankers, had acquired 
great wealth in France, but at the same time had often done important 
service to the country and the Crown. Under Cosimo de' Medici the 
Elder, his son Piero and his grandson Lorenzo, the connection gained 
political importance, at first on the side of the Medici, to whom the 
French King's favour was important for their political ends. Since their 
opponents also sought this favour, the rivalry so developed only served 
to make Florentine policy dependent on France and to give the French 
the casting vote in Italian affairs. 1 

We shall see in detail later with what energy and success Louis XI 
and his successors strove to attract and keep at Lyons the international 
markets, which since the decay of the Champagne fairs had been held at 
Geneva, and which were of the greatest importance for the whole of 
Southern Europe. Their aim was chiefly the Florentine merchants. It 
is doubtful, however, whether Louis XI meant to entangle the Floren- 
tines in their relations with France to such an extent that they would 
never be able to free themselves. In any case, throughout his long reign 
he never tried to use his growing influence over the Florentines for his 
own political ends. His dislike for foreign wars is given as the explana- 
tion for this omission. In view of what is known of his character it is 
certain that Louis XI would not have taken such pains with the Floren- 
tines without some definite purpose. He must at least have wanted to 
put their trade and their capital as freely as possible at the disposal of 
France. This purpose was attained. It was not the military adventures 
of Charles VIII and his successors in Italy that brought lasting advant- 
age to the French Crown, but the large increase of economic relations 
which had followed from the Lyons fairs. 

In 1462 the King had pronounced his ban on the visits to the Geneva 
fairs, and in 1463 he transferred their privileges to Lyons. Immediately 
the Florentine merchants, who had previously done business in large 
numbers in Geneva, transferred their factories to Lyons. A factory of 
the Medici is mentioned theie in 1464; and their first chief representa- 
tive was Francesco Nori. The King at first does not seem to have done 
business with them on a large scale. A coolness moreover soon arose 
between Louis XI -and the Medici, whom he accused of having advanced 
large sums to the King of England and the Duke of Burgundy for the 
war against France through their branches in London and Bruges. He 
accused Francesco Nori of having supported his enemies. On the dis- 
charge or recall of Nori, the coolness ceased. Even after this it appears 
i . Buser, Die Beziehutyen, der Medicaer zu FranlreM, pp. 33, 105 fi. 


that the political and monetary interests of the Medici were often at 
odds, until the political interests finally won the day. 1 

About 1470 there were two Medici banks in Lyons. The chief bank 
('e grandissimo,' according to Benedetto Dei) was that of Lorenzo e 
Giuuano Medici, Francesco Sassetti e Compagnia. Their chief agent 
was then Lionetto de Rossi, who gave his master Lorenzo de Medici 
even greater cause for discontentment than Tommaso Portinari. It is 
said that he managed so badly that the bank was several times on the 
verge of bankruptcy, and in 1481 Lorenzo insisted on the winding up of 
the Lyons factory. Lionetto de Rossi was, however, only recalled and 
the Medici business in Prance took a turn for the better under the steady 
hand of Cosimo Sassetti. 2 

The second Medici bank in Lyons belonged to the Her Francesco 
branch of the family. It sent money to Florence and also carried on a 
trade in cloth. 

There were also banks of the Pazzi, Capponi, Corsini, and Ghini 
Portinari and Company. About 1470 the Florentines already had in 
Lyons a consulate and their own church. There were besides large 
numbers of Florentine bankers and merchants in Avignon, Montpellier, 
Marseilles, and Aigues-Mortes. 8 

Important as Florentine interests in France already were, they were 
greatly increased by the fact that every one of the many revolutions in 
Florence ended with the banishment of many of the adherents of the 
defeated party and a great number found their way to Lyons. This 
happened in 1466, 1478, 1494, 1512, 1527, and after the fall of the 
Republic in 1530. This and the intermarriage of two daughters of the 
Medici with French Kings (1533 and 1600) made the number of Floren- 
tines settled in France, and until the middle of the sixteenth century 
especially in Lyons, so great that people could speak of 'a French Tus- 
cany.' In order to get a clear idea of the importance of the Florentines 
in the French state, we only have to remember the two Strozzi, who 
were commanders by land and sea of the Duke of Luynes, the all- 
powerful minister of Louis XIII, an offshoot of the Florentine Alberti, 
of the Marechal d' Ancre (Concini), the favourite of Marie de Medicis, of 
the Due de Retz, Marechal de France and High Chamberlain under 
Charles IX and Henry III, and his brother the Cardinal Gondi. 4 These 

1 Buser, pp. 119, 141, 156, 166 ff. Vaesen et Oharayay, Lettres de Louis XI, voL 
m, 43 ff., 251; Pagnini, Delia Detima, U, 60. 

1 Buser, pp. 248, 294; Reumont, Lorenzo de' Medici il Magnifico, II, 301 ff.; 
Gingina, Deptches de* ambaanadeurs milanais, II, 309; Kervyn de Lettenhove, 
Lettrea et negotiations de Philippe de Commines, 1, 214, U, 83 ; Molini, Document 
di storia italiana, I, 13 ff. 

MS. of Benedetto Dei quoted in Pagnini, H, 304, of. H, 50. 

As in L'Hermite de Solier, La Toscane Franfaiee (Paris, 1661). 


brilliant figures are not, however, our chief interest. The people we 
deal with are men whose work made less stir, but left far deeper marks 
in the French state than that of the warriors and statesmen we have 

The Period 1494-1612. At the death of Lorenzo il Magnifico, in 1492, 
the direction of public affairs in Florence passed into the hands of his 
son Hero. The Duke of Milan, Lodovico Moro, was then trying to sum- 
mon the French to Italy in order with their help to obtain supremacy in 
the peninsula. Hero de Medici accordingly found himself in a situation 
with which he could not cope. He refused to lend money to the French 
King Charles VIII, who was bent on trying his luck in Italy. The King 
accordingly borrowed the necessary money for his expedition from the 
Genoese under the Duke of Milan and banished the agents of the Medici 
from France. 1 

In Lyons it was feared that the other Florentines would also be 
banished, and this measure was actually threatened in order still further 
to excite the rage of the people of Florence against Hero de Medici and 
so by his fall to obtain support for the great French expedition. This 
two-edged measure was, however, not put into force. As the Florentine 
envoys then staying in France said in their letters to Hero, the Province 
Lyonnais would have lost a third of its revenues at the going of the 

The French King's anger was, however, only directed against the 
main branch of the Medici, whose business in France thus came to a 
sudden end. The other branch of the Medici, that of Her Francesco, 
which was at enmity with the others, received special marks of favour 
from the King. 

In November, 1494, Hero de Medici was driven from Florence. 
Amid general rejoicing King Charles made a state entry into the city 
and concluded a treaty with the Republic which secured to Florentine 
citizens the privilege of trading in his kingdom with the same rights as 
his own subjects. In return Florence promised to pay the King 120,000 
gulden. These two clauses of the treaty, though hitherto they have 
excited little attention, are more important than those which relate to 
the cession of Hsa and other cities to the Florentines. They are specially 
notable for the fact that they were not broken. 

The first to betray the Medici in this crisis and thus to seize the 
slipping reins of government was Piero Capponi. In all probability he 
had conspired to this end with the King, during the long months when 
he stayed with Trim as Florentine envoy during the preparations for the 
Italian expedition. On the fall of the Medici, when Charles was in their 
palace negotiating with Capponi about the treaty, he wished to impose 

* Desjardins, Negotiations diplomat, de la France avec la Tovxmt, I, 313,1408. 


hard conditions on the Republic. Capponi is said to have torn up the 
draft treaty and to have replied to the King's angry exclamation, 'We 
will have the trumpets sounded,' 'We will ring our bells,' whereupon 
better terms were granted. This account of the proceedings cannot 
be accurate. We get a better glimpse into the play of the interacting 
forces when we notice that the Florentine war indemnity was paid 
either wholly or in. part through the agency of the Capponi in 
Lyons; and that as late as 1498 the Capponi acted as agents for 
the letters between the Florentine Signoria and their envoys in 
France. 1 

The period of thirty-six years which followed, the final period of 
Florence as a free city, is filled with the struggles of the democracy, 
which sided mainly with the French and the Medici party which 
favoured or opposed the French in accordance with their own ends. 
There had then arisen the influential group of the Optimates, who 
supported the Medici and hoped to form a plutocratic government 
with their help. 

In the first half of the period (1494-1512) democracy ruled, from 1602 
onwards under the Gonfaloniere Piero Soderini. It might be thought 
that in these years there would have been constant and close economic 
and political connections between Florence and the French Crown. 
This, however, does not appear to have been so. There were many 
political disputes, especially about Ksa, which the French, contrary to 
their engagement, did not hand over to Florence. The King on his side 
made repeated demands on the Republic for money, which were either 
granted unwillingly or often not at all. The Republic did not wish to 
destroy its chances with the Emperor, and tried as far as possible to 
remain neutral, thus incurring the charge from the French side of 
favouring the policy of the Emperor. 

In these circumstances it is not to be wondered at that so little is 
heard of financial transactions between Florentine merchants estab- 
lished in Lyons and the French Crown. This may be partly due to lack 
of information, but Machiavelli, who visited France three times at this 
period as the envoy of Florence, would surely not have passed it over 
in silence if the merchants of his country had then been very important 
to the French Crown. 

After his third embassy (1510) he gives a detailed account of French 
finances, and especially of the extraordinary financial measures. He, 
however, says nothing as to floating debts raised from the Florentines. 2 
On the other hand, we know that the Florentines living in the Nether- 
lands, especially the Frescobaldi and Gualterotti, had frequent money 


Ct Ritratti, DeOe Cose di Franeia. 


dealings at this time both with the Emperor and the Netherlands 
Government, which was closely allied to him both dynastically and 
politically. It appears therefore that the Florentines were then not 
very dependent on the French Crown in an economic sense. The fact 
is noteworthy that the Florentines who played the chief part in Ant- 
werp belonged to other families than those who had their chief business 
in Lyons and that the trade of the latter no doubt extended still further 
in this period, and thus increased the community of interests between 
France and Florence. 

Jacopo Salviati and Filippo Strozzi, 1512-27. In 1512 the Medici 
returned to Florence and the political relations with France became dis- 
tinctly cooler. In the following year a Medici became Pope as Leo X 
and Florentine policy became entirely dependent on that of the Papal 
Curia, which was swayed by other motives than the monetary interests 
of the Florentine merchants. These nevertheless now became important 
politically. They were incarnated in the persons of the Pope's brother- 
in-law and trusted adviser, Jacopo Salviati, and in Filippo Strozzi, the 
son of that Filippo Strozzi 'the Elder' who had made his fortune in 
Naples. He, like Jacopo Salviati, had married a Medici and had been 
nominated by the Pope as Depositario of his revenues. These men were 
undoubtedly the two most distinguished citizens of Florence. As 
leaders of the Optimates they had helped largely in restoring the Medici 
and were now their chief supporters. Above all, they were both at the 
head of large banks which had branches both in Home and Lyons. 
Our sources unfortunately do not enable us to follow out in detail the 
connection of all these relations; they leave no doubt, however, that such 
a connection must have existed. 

barked on the expedition to Italy which resulted in the victory of 
Marignano and the conquest of Milan. Pope Leo was long undecided 
which party to choose, and we hear that his reflections at this time 
turned on the business interests of the Florentines in France. 1 Never- 
theless he maintained the alliance with Spain and only went over to the 
French side after Marignano, hoping by so doing to ensure the supremacy 
of his family. 

At this time we again hear of large financial transactions between the 
Florentine merchants in Lyons and the French Crown. In contrast to 
his predecessor Louis XII, Francis I was a prodigal prince, splendour 
loving and open-handed. His coronation cost enormous sums, more than 
the first expedition to Italy. The customary extraordinary forced loans 
from his subjects now proved totally insufficient. Loans had to be 

'GmoCapponi.GwcAtc^cd^r^.BepuWii. German trans, by Hans Diitschke, 
H, 291. 


raised from the Florentines in Lyons on the security of future revenues. 
In the beginning of 1516 he owed them apparently 300,000 ecus, which 
fell due but could not be repaid, and the Lyons Fair settling days had 
accordingly to be extended. The loan, however, still remained unpaid, 
as the royal finances were entirely exhausted. Nevertheless in April 
more money was raised for an expedition to Italy, which, however, did 
not come off. This was done by pledging the salt tax to some Floren- 
tines. At this time the Salviati had the largest business house in Lyons. 
The Pope used all his power to further their interest even in regard to 
the French King. When in 1518 Francis was planning a crusade against 
the Turks, for which the Pope had granted money, he wished that this 
money should be deposited in the Salviati's bank in Lyons, but the 
King did not agree. 1 

Jacopo Salviati stayed in Borne, and was therefore able to keep a good 
watch over his financial interests. Filippo Strozzi, on the other hand, 
returned to Florence, where Lorenzo Medici honoured him, but kept him 
as far as possible from state affairs. Only when Griulio Medici, who was 
Filippo Strozzi's brother-in-law and most intimate friend, became the 
most important man in the state, Filippo obtained great influence and 
began to neglect his business. After Pope Leo's death he was sent to 
Home in 1521 and found the affairs of his bank in great disorder. His 
credit had been gravely affected by bad management and a large failure 
in Naples. He managed, however, to put things straight again and to 
maintain the honour of his house. Pope Adrian VI made him Treasurer 
of the Curia, and under Clement VII he went even farther. With him 
he was on a very confidential footing and served him in a most liberal 
manner without commercial calculation, for he was far too ambitious 
and restless to be able, like Jacopo Salviati, to combine his monetary 
interests with his political aims. Both men succeeded, however, in 
getting their sons into the College of Cardinals. We shall soon see that 
in the Italian wars of the French King the Florentines must have trans- 
acted a large amount of financial business for him; but their economic 
dependence on the French Crown only developed very gradually. In 
the election of the King of the Eomans in 1519 they did nothing for 
Francis, while the Gualterotti, as we know, shared in the loans by which 
the House of Hapsburg secured the election. 

In 1521 the King ordered all the property of the Florentines in Paris, 
Lyons and Bordeaux to be seized. Everything was inventoried and a 
watch was set on the houses. This, it was said, had come about because 
the Florentine bankers had betrayed the war preparations by their 
letters to Flanders and other countries of the Empire. Moreover, they 

1 Canestrini, Nfgoe. dipL de la France avec la Toscane, H, 761, 765, 770. Brewer, 
Calendar II, No. 1303. Marino Sanuto, Diarii, XXTT, 167; XXVI, 259, 303, 


had promised the King a loan of 100,000 ecus, but afterwards had lent 
this money to the Emperor in return for a charge on the revenues of 
Naples. In the following year the Emperor complained that the Floren- 
tines, who had been unwilling to advance him on good security 20,000 
ducats, had now engaged troops for the French King without asking for 
security. 1 We see therefore that the Florentines were still wavering. It 
needed events of a different order entirely to destroy the neutrality of 
Florentine capital. 

The Period 1527-30. The sack of Rome by the Emperor's troops in 
1527 brought heavy loss to the Florentines who lived or had factories in 
that city. This catastrophe, however, was only a beginning of a series 
which affected their trade yet more adversely. The next of these events 
was the second expulsion of the Medici from Florence. The group of 
Optimates who were specially influential in the last years of the Re- 
public contained many different elements. Their chief common charac- 
teristic was that they aimed at a government of the distinguished and 
rich. These aims naturally did not appeal to the people. The Optimates 
therefore sided with the Medici and the Medici with them. Their rela- 
tionship was, however, quite peculiar. The Medici made use of the 
leaders of the Optimates with their distingusihed kinsman Pope 
Clement VII, and they also helped them in business; but they tried to 
keep these dubious friends as far as possible out of Florentine politics. 
The Optimates' most respected leader, Jacopo Salviati, was kept by the 
Pope constantly busy in Rome, and Clement was not displeased that he 
as well as the other great Florentine bankers should incur popular hatred 
in the Papal State on account of the financial transactions which they 
undertook in the service of the Curia. Further, when, in 1527, the Pope, 
either from imprudence or stinginess, had disbanded his troops so that 
he was overcome practically without resistance by the Imperial forces, 
he had the report spread that Jacopo Salviati was to blame for this. It 
was only on his deathbed that the Pope withdrew this false charge which 
had made Salviati hated throughout Italy. In 1526 the Pope had been 
besieged in St. Angelo by Colonna, instigated by Hugo di Moncado, an 
emissary of the Emperor, and had been forced to come to an agreement 
with Moncado. He had then handed over Filippo Strozzi as a hostage 
and had neglected to ransom him. Strozzi, however, was released by 
Moncado in order to turn Florence away from the Medici. He, however, 
returned to the Pope, and waited a year for the moment for taking 
revenge and achieving his party's end. 3 

1 Journal d'un bourgeois de Paris sous le rigne de Franfou I, ed. Lalanne, p. 103. 
Beigenroth, Calendar II, 407. 

1 Ct Varchi, Star. Fiar. Lib. II, Filippo Strozzi'a biography by hia brother 
Lorenzo and Macbiaveffi's letters to Quiooiardini. 


After the sack of Home he hurried with his wife to Florence, bringing 
the first certain news of the great catastrophe. Helped by his wife and 
another leader of the Optimates, Niccolo Capponi (whose father Kero 
Capponi had been the chief actor in the expulsion of the Medici in 1494), 
Filippo Strozzi managed to get the Medici out of the city under his 
protection, and thus remained on good terms with them. This rendered 
him suspect to the people, who anyway hated the Optimates. Niccolo 
Capponi, however, still retained the confidence of the majority and was 
chosen Gonfaloniere. Even he, however, in spite of his undoubted 
honesty, was the subject of violent attacks. 

In 1528, after his wife's death, Strozzi left Florence for Lyons, giving 
business there as his reason. There he occupied himself with study and 
had dealings only with the Florentines in Lyons, with whom he made 
himself very popular. On one occasion, during a famine when the rich 
Florentines were threatened by the people, Strozzi organized the 
defence, arming all men capable of bearing arms and so saving the city 
from the looting which threatened it. 

Meanwhile Niccolo Capponi was deprived of his office as Gonfaloniere, 
tried and only just escaped being sentenced. The attempt to bring in a 
government of Optimates thus utterly failed, and for a while the 
Democrats ruled once more. But their days, too, were numbered. In 
the summer of 1529 Charles V came to an agreement with the Pope 
which brought the Emperor the grant of the profitable Gruzada and 
other ecclesiastical sources of income. The price of this agreement was 
the Republic of Florence. 

At this time the Venetian envoy Suriano gives us the following 
account of the Florentines' business: 'The Crown of France owes 
private persons in Florence 600,000 ducats. In Home the Florentines 
have spent 350,000 ducats on buying offices. They suffered great 
losses at the sack of Rome. Formerly Florence alone made a profit of 
8,000 ducats a week from goods delivered to Rome, but now only 1,000 
ducats or a little more, since intercourse with Rome has been forbidden 
for fear they should again come to depend on the Pope. Trade in com- 
modities with Naples has been destroyed by the war; the export of 
silks and brocades to France has likewise been destroyed by the war and 
the secession of Genoa to the Emperor's side. Trade with Flanders has 
been stopped by the closing of the Venetian territory. These barriers 
are, however,circumvented,andinspiteofaU these losses and hindrances 
the Florentines are still extremely rich. Eight or ten families have about 
100,000 ducats apiece. Tomasso Guadagni is said to have 400,000 
ducats, though most of it is in France; Ruberto Degli Albizzi about 
250,000, Pier Salviati 200,000; the Bartolini, Antinori, Soderini, 
Strozzi, and others, each more than 100,000. More than eighty families 


have between 50,000 and 100,000, and the number with property worth 
less than 50,000 ducats cannot be counted.' 1 

Among the families here named as the richest, the Salviati and the 
Strozzi at any rate belonged to the party of the Optimates. The 
Florentine historian Varchi also calls Pier Salviati very rich, and says 
that he was one of those who lived in the grand style, not like merchants, 
but like nobles. The Guadagni, the Albizzi, as well as the Salviati, had 
apparently made most of their money in France. The' firm of Tommaso 
Guadagni e Gompagni is mentioned in Lyons in 1508, and Ruberto 
Albiszi in 1523, both in unimportant financial dealings with the French 
Crown. 2 Salviati's transactions, however, were more important, and 
here we must pause for a moment. 

In June, 1528, Clerk, the English envoy in Paris, was trying to defend 
himself against Wolsey, who charged him with having used Piero Spino 
as an agent for a payment to the French Xing though he knew him to be 
in the service of the Genoese Antonio Vivaldi and on the side of the 
Emperor. Clerk answered: 'And as for this man, he is a Florentyn, on 
that hath contynuyd and folowyd the French* Courte many yerys, 
and on that hath made and makith contynually all the great exchanges 
that hath ben by th King for his affayres of Italy, whither th Frenche 
King hath not always sent redy monay, as your Grace can right well 
considre if he wer imperyall, the Frenche King and other of the Coun- 
saill here wold not use hym, and trust hym with ther monay, as they 
have don and dayly doo.' . . . 8 

This Piero Spino or Spins was apparently an important person in 

Tucher, Caspar Ducci and Hans Kleberg, he was half financial agent and 
half banker. He is mentioned in 1524, just before the battle of Pavia. 
He was then sent by King Francis in order to look after a convoy of 
munitions to Cardinal Salviati, a son of Jacopo Salviati, and at this 
time Papal legate in Lombardy. At the beginning of 1527 Pope 
Clement VII was, as we know, in a critical position and besought the 
French King for help. After long hesitation it was decided to give Piero 
Spino 10,000 scudi to be sent to Lyons, where with the 20,000 scudi 
already there, they were to be given to the Salviati for transmission to 
Italy. In February, 1529, it is reported that the Salviati undertook for 
the King a payment to Italy of 30,000 scudi.* A Tucher business letter 
of 1532 mentions Leonardo Spino as the Salviati's agent in Lyons. 

> Albfei, B&at. d. Ambasc. Venet., Ser. II, yoL V, p. 420 fi. 
* Pagnini, Detta Detima, I, 129; Tardif, Monuments historians*, No. 2957. 
Brewer, Calendar, No. 4390 ; full text in State Papers, Henry VIII, voL VII, 
p. 83. 

Oanartrini, 2fgoc. dipl. H, 808, 887, 1049. 


This all seems to show that the Spin! had close business connections 
with the Salviati and that Piero was probably their representative at 
the French Court. 

To return for a moment to the Venetian envoy's report in 1529. 
Even supposing its figures are not quite accurate, it shows at least that 
the large Florentine bankers in the year 1529 had invested a consider- 
able part of their property in France and chiefly in the towns of the 
French Crown. This was when the agreement between the Emperor and 
the Pope had already sealed the doom of the Republic. In vain Florence 
besought the French King for help: he gave nothing but empty pro- 
mises. As he had deserted Genoa, so now in the peace of Cambrai he 
abandoned Florence. He never even sent help in money to any con- 
siderable extent. He had just ransomed his sons from the Emperor for 
the enormous sum of 1,200,000 crowns and had nothing to spare for 
Florence. The Republican Florentines in Lyons entreated hi to pay 
at least a part of his debts to them as they fell due, but he only sent 
30,000 scudi to Italy through the Salviati in 1529. When in the year 
following it was proposed to repay the same amount, this proposal 
was forbidden by the Papal legate, who appealed to the Treaty of 
Cambrai. 1 

A few of these Republicans in Lyons, among them Ruberto degli 
AHnzzi, succeeded in getting together another 20,000 ducats. Those 
who shared their views in England and the Netherlands also collected 
a little money - not much, for the Florentines in those countries were 
now neither numerous nor specially rich - and moreover they did not all 
favour the Republic. The Florentines in Venice gave nothing, in spite of 
frequent entreaties. Few too of the Optimates came to the help of the 
Republic in its extremity. The Consul of the Florentines in London, a 
Carducci, obtained money from King Henry VIII, but as he went bank- 
rupt immediately the King lost more than 50,000 ducats. All help was, 
however, vain; the Republic was lost. 

It is not our business to inquire into the importance of this event in 
the history of Italy. It is important for us to ascertain the effect on 
Florentine business of the loss of their freedom and the final supremacy 
in Italy which the House of Austria obtained after its long struggle with 

The Florentines now put their business and their capital almost 
exclusively at the disposal of the French Crown, which had so long 
deserted their cause. 

In Rome and Naples the Florentine bankers were soon completely 
driven out by the Genoese; in the Netherlands by tie Genoese and the 

i Canestrini, H, 1003 fi., 1049. Gayangos, Calendar IV, 1, pp. 375, 522, 691. 
Varchi, ed. Arbib. II, 323, 361 ff. Brewer, Calendar IV, 6774. 


South Germans; in England by the English merchants. They had never 
played a prominent part in finance in Spain. Their finances in France 
developed in consequence all the more vigorously. 1 

An important fact, which has hitherto escaped the notice of historians, 
is that the victory of the House of Austria drove Genoese capital into the 
Imperial Spanish camp, while it made Florentine capital entirely French. 

No doubt political and economic forces combined to produce this 
development. The political causes were decisive, but they again had 
economic roots. If the greater part of the rich Florentine families 
sympathized with the French, this was because their monetary interests 
bound them to France. They could not free themselves; the com- 
munity of interests between them and the French Crown became closer 
and closer. Many of them hated the Medici; and when banishments on 
a large scale began once more, the Florentine colony in Lyons became 
a hotbed of conspiracy against the new Tuscan dynasty. Many left their 
country of their own free will, because there was no opening for their 
energies. Political confusion and speculation meant ruin. Anyone who 
could not make terms with the new order had to try his luck abroad. 
No pkce offered such favourable conditions to the Florentines as 
France, where they were welcomed at the Court with open arms; for 
the enemies of the Medici were enemies of the Emperor. These refugees 
from Florence therefore for a long time cherished the hope of driving 
out the Medici by means of French help. There were several attempts, 
though the refugees had to help themselves almost entirely. The 
French Court made all possible use of them, learnt from them all it 
could and accepted their good money very joyfully, but never again 
involved itself in Italian adventures. The marriages of the daughters of 
the Medici with French princes made no difference, as they were not 
important for French foreign policy. Both before and afterwards 
Tuscany under Hapsburg protection counted among the enemies of 

The Strozzi after 1530. Capponi had died just before the fall of the 
Republic. The other leaders of the Optimates, Jacopo Salviati and 
Filippo Strozzi, directly afterwards tried to realize the aim of their 
party, the creation of an oligarchy under the leadership of the Medici. 
Pope Clement, however, was now aiming at an absolute monarchy, and 
in this plan he made skilful use of the leaders of the Optimates, so that 
all the popular hatred fell to their share. When they had done their part 
and Alessandro de' Medici was Duke of Florence, he soon rid himself of 
such questionable adherents. Filippo Strozzi, who had played the chief 
role in the comedy the Pope had arranged, was accused of having wished 

'For Borne, cf. Benmont, Oeechichte der Stadt Bom, m b, 449 ff., 683; for 
Naples, Rocco, De' lanM di Napoli, p. 3 ff. 


to poison the Duke, and though he established his innocence he thought 
it better to go to Home. 

Here Strozzi came to an arrangement with the Curia, but he could 
only get his claims recognized by renouncing many years of accrued 
interest. When, in 1533, the Pope had betrothed the youthful Catherine 
de' Medici to Prince Henry of Prance, he asked Filippo Strozzi to escort 
the bride to Marseilles. He wished to utilize the Strozzi's credit in order 
to pacify the French Court on the subject of Catherine's dowry. 
Filippo accepted this task and promised to pay over the dowry of 
130,000 scudi within a year. At the wish of the Pope, who was anxious 
to get him out of Italy, he remained, though much against his will, for 
six months longer as Papal legate at the French Court, where he made 
himself much loved by the King. 

Meanwhile Filippo's son Piero was imprisoned in Florence on a false 
charge. His father complained in vain both to the Pope and Alessandro, 
and it was only after a long interval that Piero regained his liberty. 
He thereupon set out for France, and meeting his father in Lyons, he 
told him that the Duke had obviously decided not to suffer the Strozzi 
to remain in Florence any longer. 

This was in 1534, when the Pope was very ill. Filippo Strozzi found 
himself, at the French King's wish, on the journey to Borne, where it 
was intended that he should further French interests in the case of the 
election of a new pope. This journey met Filippo's wishes all the better 
because there were still arrears of 60,000 scudi outstanding on 
Catherine's dowry. When he reached Rome the Pope was already dead. 

As we know, the Florentines, and more especially the Strozzi, were 
hated by the Eoman populace as the directors of the Papal finance. 
At the time we speak of, the people thought that they had a special 
reason for this hatred. The Strozzi in Borne had promised to provide 
the Eternal City with corn from Sicily at an agreed price. The Viceroy 
of Naples had, however, forbidden the export of the wheat, so that the 
Strozzi's agents had had to import it from distant countries - Brittany, 
and even Flanders - a thing which very rarely happened. Some cargoes, 
moreover, were lost by shipwreck, and others arrived behind time. 
There was a famine in Borne, and the people in their anger tried to 
destroy the Strozzi's house. 

This was the state of things which Filippo Strozzi found on his 
return to Borne. He took it greatly to heart; and when he noticed that 
his credit was suffering, he made over the Boroan business to two 
Cardinals on terms very unfavourable to himself. The new Pope, 
Paul III, demanded the return of the ecclesiastical revenues and other 
valuable objects pledged to Strozzi on account of the arrears of 
Catherine de' Medici's dowry. Filippo was clever enough to accede to 


this demand, and the Pope thereupon recognized his predecessor's 
engagements, so that Strozzi once again only lost the interest. 

Meanwhile he tried to liquidate his property in Florence. This, how- 
ever, did not succeed as he had hoped, for the property was valued at 
over half a million. Nevertheless he did not return to Florence and his 
relations with the Duke Alessandro became steadily more unfriendly. 
Filippo joined the movement of the banished Republicans and accused 
the Duke of having tried to have him assassinated. ' 

The Florentine Republicans now (1535) for a short time pinned their 
faith to the Emperor, but soon saw that nothing was to be expected 
from him. He protected Alessandro in spite of all his crimes, and finally 
gave him his daughter in marriage. The banished Florentines were 
thus thrown once more entirely on the French side. The Cardinal du 
Bellay, then French ambassador in Home, was nevertheless nervous 
lest these negotiations with the Emperor should succeed and warned 
Strozzi not to take part in them. In order to exert still greater pressure 
the King had Filippo's agent in Lyons, Gian Francesco Eini, imprisoned 
on account of the 30,000 scudi still owing on Catherine de' Medici's 
dowry, and this in spite of the fact that the King had for a long time 
himself been owing Bini a larger sum. This incident, however, seems to 
have been cleared up when the Florentine negotiations with the 
Emperor broke down. 

The renewed outbreak of war between the Emperor and France once 
more awakened the hopes of the Florentine exiles. King Francis, they 
thought, would go to Italy with a large army to set Florence free. 
They accordingly contributed to the cost of the French annanent 
with advances of money. The agents of Filippo Strozzi in Lyons ad- 
vanced 15,000 ecus, although their master could not as yet be counted 
among the avowed enemies of the Medici. 

When the news of Filippo's shares in the French war loans was 
brought - in an exaggerated form - to the Emperor, he caused Strozzi' s 
property in Naples and Sicily to be confiscated. Strozzi now feared that 
the same thing would happen in other parts of the Empire, where he 
had money owing to Wyn, and he was in fact forbidden under a heavy 
penalty to have financial dealings with the French Court. He accord- 
ingly sent his son Piero in all haste to Lyons to get the transaction 
annulled. This, however, was not necessary as no further steps were 
taken against the Strozzi. The sending of Piero, however, in itself 
turned out very badly for his father, because King Francis caused the 
young man to take part in the war in Piedmont against the Imperial 
forces, and even made him a commander. His father, much incensed, 
tried in vain to turn him from his decision, and as he no longer felt safe 
in Borne, went to Venice. 


The Emperor had hitherto refused to yield to the pressure of the 
Duke of Florence and have him proscribed, but he now gave him up. 
Hereupon Filippo and his sons Piero and Euberto, together with many 
of their friends, were declared rebels, and all the goods of the Strozzi in 
Florence were confiscated. Filippo now had his employees in Venice 
and Lyons informed that if they wished they could leave his service, 
since it was forbidden to serve rebels. They all, however, declared that 
they would not leave him, so that Filippo'e commercial interests did not 

He now lived quietly under the protection of the Signoria of Venice 
and occupied himself chiefly in study, till one night Lorenzo di Pier 
Francesco de' Medici came to him and told him that he had just 
assassinated the Duke Alessandro. This was the signal for Strozzi to 
begin open war against the dominion of the Medici. Under the advice 
of the French envoy in Venice he joined ths Cardinals Salviati and 
Ridolfi, who had both been among the chief opponents of the murdered 
Duke. A coup was prepared against Florence. Cosimo de' Medici was, 
however, at once chosen Duke, and the Emperor sent troops to Florence 
which were more than a match for their opponents. They accordingly 
wished to give up the game. The French, however, now interfered, 
promising to support them with money to hire troops. Here the prime 
mover was the Cardinal de Tournon, the Governor of the Province 
Lyonnais. Strozzi, however, answered that the favourable moment was 
past, and the opposing party were now too powerful. Moreover, he had 
never been repaid the 15,000 scudi which he had lent the Cardinal on 
the King's account some months before in Lyons for the war in Pied- 
mont. Evidently the King wanted to make war at Strozzi's expense. 
The French envoy in Venice hereupon declared that the King would 
give 20,000 scudi if the Florentine exiles would do the same. The 
exiles, however, would not agree and sent Bartolomeo Cavalcanti to the 
King to inform him as to the state of the case and to tell him that the 
undertaking could not be carried out unless he granted 100,000 scudi. 
Meanwhile the French King had sent Filippo 15,000 scudi and urged 
him to free his country with this exiguous sum. Piero was also working 
in the same direction. He had hired troops which he could not keep 
together without a war and he wanted to earn laurels. Filippo, how- 
ever, stood his ground. He kid stress on the fact that the undertaking 
had no hope of success, and declared that it was for princes and republics 
to keep up armies and not for private people. Hereupon his own son 
and the other exiles accused him of putting his own profit before his 
country. The French advanced no more money, so that Piero had to 
disband his troops, and went to Rome. At last, against his better judg- 
ment, Filippo gave in so as to avoid the hatred of Ms friends and kins- 


men. He paid 20,000 scudi, and said that he would make further contri- 
butions if the exiles did the same. The enterprise failed. Filippo was 
taken prisoner, and in all probability secretly murdered. The victorious 
Duke meanwhile spread the report that he had killed himself after 
writing on the wall of his cell in his own blood the words, 'Exoriare 
aliquis.' (May some (avenger) arise.) We have seen what matter-of-fact 
considerations played a decisive part even in Filippo Strozzi's last 
venture, and it is on this account that we have treated it in detail. The 
sad end of the man called with many others the 'richest man in Italy 1 
made a deep impression on MB contemporaries. 

Two of his sons took military service under the French - Piero became 
Marechal, Leo, the Prior of Capua, an admiral. They both remained 
bitter enemies of the Medici. The fact that their service was chiefly 
military did not, however, prevent them from giving the attentions to 
finance which was demanded by its importance in war. In 1546 the 
Schmalkaldian League sent Jacob Sturm of Strassburg to France to 
negotiate with the Kg about a treaty and the grant of subsidies. 
Sturm got into touch with the Marechal Strozzi, who offered to put the 
sums paid by the King to himself at the disposition of the League on 
security without interest. Strozzi on this occasion showed great 
technical knowledge of finance. The same thing is reported of him again 
in 1557. 1 

Two other members of another branch of the family, Giulio and 
Lorenzo Strozzi, settled in Lyons after the great revolution of 1530. 
They founded a banking house, which participated in the loans of the 
French Crown as early as 1536-7. In 1576 the firm was called Alfonso 
e Lorenzo Strozzi. They then used the Genoese bill fairs, but their 
domicile was certainly Lyons. On the other hand Lorenzo Strozzi, who 
is mentioned as a financier under Henry III, had already moved to 

Other Developments of Florentine Business in France until the Death of 
Henry II, 1559. Our sources do not enable us to follow in detail the 

the century following the fall of the Republic and we must content our- 
selves with a general sketch. 

In the first period, which extends to the financial crisis of 1557 and 
the death of Henry II, the firms we already know, the Salviati Capponi, 
Albizzi, Guadagniand Strozzi, still play the chief part. Their financial 
relations with the French Crown were first managed by the Cardinal de 
Toutnon, Governor of the Province Lyonnais. In June, 1537, he was 
granted powers to give security on the royal revenues for the sums lent 
to the King by Tommaso Guadagni, heir of Tommaso the Elder and also 
i- Sturm's Eeport in Augsbg. Stadtarohive. Brown, Calendar VI, 904. 


of Olivieri Guadagni. In August this process was repeated and in 
April, 1538, the Guadagni and the Delbene, a family which had just 
begun to come forward, shared in the lease of the salt tax effected 
through the Cardinal. In 1543 Albkzo Delbene, together with Tommaso 
Certini (?) took a lease of the alum import for ten years, and Albizzo's 
brother Alberto Delbene was sent in 1548 by the King to the Pope to 
promise him 350,000 scudi of subsidy, in case of an attack from the 
Emperor, though in fact no such attack was thought of. In 1559 
Albizzo Delbene still belonged to the Florentines who followed the 
French Court. 1 

In 1545 the firm Averardo Salviati e Compagni in Lyons secretly 
tried to induce South German merchants to share in the loans of the 
French Crown and were also in touch with Antwerp for the same pur- 
pose. These attempts, as we have seen, were successful. We have a list 
from the year 1553 giving the shares of the Florentine business houses in 
the French loans. They amount to a total of 523,075 ecus, not so much 
as the South Germans and Swiss with 720,925 ecus, but nevertheless a 
large sum, which in the next few years increased greatly. The Salviati 
in 1553 advanced a further sum of 99,325 ecus to the King. 8 

This was the period of the Sienese war. Pier Strozzi as a French 
Marechal defended the Republic of Siena, threatened by the Duke of 
Florence, Cosimo, and the Spaniards. The money he used to pay his 
troops was produced in great part - like the leadership of the under- 
taking - by the Florentine exiles. Siena fell in 1555, but the war never- 
theless continued and the Florentines in Lyons tried to spur King 
Henry II to fresh efforts. 

In 1556, Bindo Altoviti concluded in the name of the Florentine exiles 
a loan with the King's representatives. This amounted to 300,000 ecus, 
at 16 per cent., and Altoviti made himself personally liable for its repay- 
ment. In August of the same year the King through the Mareehal 
Strozzi once again borrowed 300,000 ecus in Lyons at 16 per cent, 
interest. Of this amount 120,000 ecus was obtained from the Floren- 
tines, in whose name Albizzo Delbene acted for the Guadagni; and 
180,000 ecus from the South Germans under Israel Minckel and Georg 
Obrecht. The whole sum was forwarded to Venice by the firm Lorenzo 
Capponi e Tommaso Kinuccini, which then managed the Guadagnis' 
business in Lyons, and it was used to pay the Pope's subsidies. The loans 
grew at an enormous rate. The Marechal Strozzi was dissatisfied with 
these transactions. At the beginning of 1557 he stated that these loans 

*Act&> de Iranvns I, vol. HI, 9055, 9252-3, 9956; IV, 13265. Desjardins, 
Canestrini, Ntgoc. diplomat, III, 232, 398. 

Seller Correspondence in Augsbg. Sfc-A; Behaim Papers in German. 
Museum; Bibl. Coste in Lyon, No. 6933. 

stopped payment. This was followed in 1559 by the peace o 
Cambresis, which made an end of the political hopes of the F! 


cost the King 23 per cent., i.e. 16 per cent, for interest, 4 per cent, on 
loss on the bill transactions with Venice, and 3 per cent, on account of 
the depreciation of the currency. 1 

A few months later came the inevitable crash and the French Crown 

e of Cateau 

exiles; and a few months later by the death of Henry II, which was equally 
final for their loans. In vain Leonardo Spino put in claims on behalf of 
the Florentine creditors of the Crown, chiefly the Capponi Albizzi and 
Salviati. Many efforts were made to come to a composition. The Floren- 
tines must, however, have lost the greater part of their money, as we 
can prove to have been the case, with the South Germans. 2 Of the rich 
Florentine families which had a leading position in Lyons at this time, 
the Guadagni and the Albizzi immediately disappear from the ranks 
of financiers. The firm Pietro Salviati e Compagni appears once more 
in 1563 in the business papers of the Welser and is not mentioned again. 
We meet Madame Delbene in financial dealings in 1582, and the Capponi 
bank was in existence in Lyons as late as 1594. These firms had, however, 
ceased to play a prominent part in finance : they had given place, either 
voluntarily or of necessity, to others among their own compatriots. 

The Time of Charles IX and Henry III. The chief feature which 
distinguishes this period from the preceding one is the transfer of the 
chief centre of Florentine finance from Lyons to Paris. In the last stage 
it ceased altogether at Lyons. In 1575 there were only a few Florentine 
houses still left there; in 1592 the Capponi alone remained, and two 
years later their firm was taken over by the Zametti of Lucca. 

The first Florentines, who under Charles IX, or rather under the 
Begency of Catherine de' Medici, again dared to have financial dealings 
with the Crown, were Orazio Rucellai and Lodovico Diaceto. The first 
had left Florence as an opponent of the Medici, and the second had fled 
on account of a murder. Both had then acquired property in Lyons. 
When the Huguenot rising of 1562 was put down in Lyons, the lease of 
the Lyons Douane was transferred to Diaceto. The Douane was an 
institution very dangerous to the fairs, and Diaceto so greatly damaged 
trade by his exactions that the city, which had previously held the 
customs itself, did everything to recover them. Though it offered as 
much as Diaceto, he was preferred, because a favourite of Catherine's 
was his sleeping partner. The lease of the domains in Picardy was then 
transferred to him, in spite of the opposition of the people. By this time 
he himself was then numbered among the favourites of the King and 
the Queen Mother - a position he owed chiefly to his liberality and the 

R. Brown, Calendar VI, 314, 330, 687, 649, 904. 

' Deejardins, Lc. HI, 400; AJberi, Belaz d. AmboM, Ventf., VIII, 424. 


splendour of his appearance. The King nominated him Court Chamber- 
lain. He then moved to Paris, wherehe built a splendid palace, spending 
150,000 ecus on its decoration. In order to enter the ranks of the French 
nobility and to marry one of their daughters, he bought Chateau- 
Vilain, which carried the title of Count, for 400,000 francs. He gained 
the means for this style of living by further financial dealings, which he 
continued during the reign of Henry III until the great investigation 
which was brought against the financiers in 1584. He then disappears 
from the scene. Henry IV remitted to his widow the sums which her 
husband was still owing on the lease of the Lyons customs, presumably 
after the strict accounting which followed the inquiry of 1584. 1 

It was also during the rising of the Huguenots in 1562 that Orazio 
Rucellai came into rektions with the Crown, which was then without 
credit and had tried in vain to raise money in Antwerp. Rucellai' s bank 
in Lyons came to the rescue and received the Crown jewels in pawn. 
This business connection seems to have lasted. Orazio is not mentioned 
in our authorities till Henry III. In 1581 he had taken the lease of the 
Gabelle, the notorious tax on salt. He demanded a reduction in the rent 
on the ground that he was suffering great loss through frauds. He was 
able to obtain this reduction because Monsieur d'O, the Surintendant 
des Finance, and the Chancellor Chiverny themselves were interested in 
the lease. Rucellai belonged to the King's Conseil, and even in the great 
inquiry of 1584 he remained at first untouched. Later it was extended 
to him, but he seems to have got off scot-free. Next year, in any case, 
he was still mentioned as making advances to the French Crown. A 
fresh inquiry in the year 1588 into the abuses which had taken place 
during the lease of the Gabelle in the years 1578-88 was originally 
directed chiefly at Orazio Rucellai, of whom we hear nothing further in 
finance. He had at this time already returned to Florence and he re- 
appeared at the French Court at the opening of the inquiry, not to 
make money, but to negotiate the marriage of the Archduke Ferdinand 
(with whom he was now in high favour) with a French princess. He 
brought this affair to a successful conclusion, and this silenced the 
attacks on his previous financial administration. He remained from 
this time onwards in Paris, where he died rich and respected in 1605.* 
The next Florentine, who came to the front as a financier under Henry 
III, was Girolamo Gondi, who, however, was only a collateral of the 
French main line of this family. Antonio, the ancestor of the French 
Gondi, had emigrated to France in 1527, where he later had a dis- 

* deqon, Histoire de Lym, VI, 13 ff. Picot, Histoire des Stats Qeniraw, HI, 32. 
Desjardins, Lc. IV, 189, 205, 610, 633. Ammirato, f am. nob. Fiorent., pp. 18, 137. 
Tardif, Monum. histor, No. 3612. 

" Desjardins, IH, 493; IV, 369, 433, 538 ff. Pioot, HI, 117, 199 fi. Archives 
ettrietues de I'hwtoire de f ranee, Ser. I, XVH, p. 51 ff. 


tinguished position at the Court of Henry II, having been already en- 
nobled. His sons were: Albert Due de Beta, Pair de France, Marechal 
and Generalissimo of the French Army, Lord Chamberlain under 
Charles IX and Henry III, Gouverneur de la Provence, etc., and Pierre 
Cardinal Gondi, Archbishop of Paris, President of the Conseil d'Btat 
under Charles IX, Henry III and Henry IV. Albert's descendants inter- 
married with the oldest French nobility. It has been pointed out that 
the Magdalena Gondi, who in 1455 married Giovanni Salviati and was 
the ancestress of Cosimo de' Medici, first Duke of Florence, was through 
Cosimo's granddaughter Maria de' Medici also the ancestress of the 
French Kings from Louis XIII and of the last reigning Stuarts. 
Girolamo Gondi belonged, however, to another branch. He was in any 
case not a protege of his distinguished cousins, but of the Cardinal 
Birague, an Italian who had & share in his business, as the Duke of 
Betz had in those of Vidiville, the first Frenchman who managed to 
penetrate the circle of the great financiers hitherto in practice, excluding 
Italians. Girolamo Gondi is mentioned under Henry IV as late as 1599. 
The Archduke Ferdinand I of Tuscany had since 1593, and perhaps 
earlier, advanced large sums to the Kings through the agency and in the 
name of Gondi. They amounted in all to 1,298,955 ecus, and were an 
important help to Henry in his struggle for the Crown. Nevertheless 
the King, when the victory was won, on Bully's advice withdrew from 
Gondi and the other old 'Partisans' the revenues they had leased, so that 
even the Archduke, in spite of repeated warnings, had a claim of 517,989 
ecus outstanding in 1619. 1 

With Girolamo Gondi the last member of the old Florentine families 
disappeared from French finance. 

In the case of the Italians who did this business down to the time of 
Colbert it is often impossible to determine where they were born. In the 
case of a few of the most distinguished we know that they did not come 
from Florence. For a long time the inhabitants of some other Tuscan 
cities Mowed in the footsteps of the Florentines. To these we must now 
turn our attention. 



^yosfmoCAj^'o/jSiewa. TLeSienese were thefiistoftheltalians to carry 
on financial business beyond the Alps. During the thirteenth century they 
had travelled to England and the Northern Kingdoms as papal collectors. 
At the Champagne fairs they played a chief part; they then were more 
1 Brown, Calendar VII, 430. Desjardins, IV, 420, 438, 492, 494, 533. Arrets du 
CaneeU d'Efat de Henri IV, 1. 1, NOB. 2260, 2866, 3122, 4236, 6581. Reumont, 
GetehieMe Toskana'e, I, 337, 342, 388, 399. Sully, Oeconomies Rayah*, IH, 68. 
Pezey, Bittoire de to maiton de Gondi. 


important than the Florentines, who did not, until the fourteenth cen- 
tury, thrust them into the background, where they remained. In Bruges 
they no longer were called a separate 'Nation.' Yet towards the end 
of the fifteenth century they had an Indian summer of their prosperity. 

For then the SpanoccM of Siena were among the most important 
bankers in Home and Naples, and Agostino Chigi 'il magnifico,' who for 
a long time had close business relations with them, was in 1494-1520 
accounted the richest merchant in Rome, or even of all Italy. Certainly 
the Italians were very generous with such superlatives. Undoubtedly 
Agostino Chigi was very rich. He left in money and personal property 
at least 150,000 ducats, as well as important real estate. His contem- 
poraries estimated his income to be 70,000 ducats, yet he was not a 
financial magnate of international importance. 

He played a great part at the papal Curia. At first he was only one 
of that considerable number of merchants who were designated 'mer- 
catores Bomanam Curiam Sequentes.' But under Pope Alexander II he 
had repeatedly supplied the pressing needs of the Eternal City for wheat 
to the satisfaction of the Pope, who gave him preferential treatment 
in other matters. So he took a lease of the duties and taxes of the Curia, 
the Roman and Neapolitan salt works, and especially the large papal 
alum works at Tolfa. He also had important financial transactions with 
Alexander VI, Julius II, and Leo X. Under Julius II he had almost the 
position of a finance minister. Charles VIII of France, on his way through 
Rome to Naples in 1494, borrowed of him. In 1511 and 1519 he helped 
the Republic of Venice with considerable sums on the security of jewels. 1 

Even larger than his capital was his credit, which he was extremely 
skilful in increasing. Some envious rivals once organized a 'run' on his 
bank. But he had foreseen this, and not merely at once paid out what 
was demanded, but he asked each one in a friendly way whether he 
would like gold or silver and in what form. Another time he exhibited a 
lot of small sacks filled with grain and implied that they were full of gold. 
By such arts he is supposed to have increased his credit so much that at 
the Sultan's Court he was called the great Christian merchant. There, 
as well as in the west, he was specially known through his extensive deal- 
ing in alum. In 1508 he got the lease of the Netherlands monopoly for 
importing alum at a rent of 85,000. But he appears to have kept aloof 
from financial business proper outside of Italy. He became known as a 
great patron of art. He helped almost all the foremost artists of the time 
who were then in Rome by giving them commissions and in other ways. 

His heirs very soon lost the greater part of his riches. The advances 
they made to the Popes Adrian and Clement were not repaid. Pope 

G. Cugnoni, Agostino Chigi H Magnifteo, Rom. 1878-1883. Also Reumont, 
GeackickteBom8,m&,441,im,mB.i AMn,Kdas.d. Ambanc. Fend., V4, p. 431. 


Clement in 1626, by means of Andrea Doria, took them away from the 
Castle of Port Heicole in Etruria which Agostino Chigi had bought 
from the republic of Siena. The sack of Borne in 1527 increased their 
losses. The lease of the alum works got into the hands of the Genoese, 
who then began to dominate papal finance. 

Gaspar Duoci of Pistoja. The man with whom we have now to deal 
had a yet more peculiar position than Agostino Chigi. He rises before 
our eyes like a meteor and vanishes again quickly, without our knowing 
whence and whither. Gaspar Ducci 1 is first mentioned in 1517 as the 
Antwerp representative of the Lucca firm of Jacopo Arnolfirci, Niccolo 
Nobili & Co. He bought for them English woollens of John Gresham, 
the representative of Richard Gresham. In the same year he appears as 
representative of Bartolomeo Gondecini. He was then one of those half 
brokers, half agents, and held a position like that of the English broker 
of to-day. He is so mentioned in 1531 and 1532. Then he was already 
much involved in lawsuits, as later his relative the well-known Gillebert 
van Schoonabeke in a petition to the Antwerp magistrate complains that 
Ducci had always been a ill-conditioned intriguer and quarrelsome 
fellow, who could not live in peace with anyone. 2 In the 'thirties Ducci 
appears to have begun to act as an intermediary in financial affairs. 
In this way he get into relations with Alexius Grimel, the Antwerp 
agent of- the Welser, Bartholomew Welser and the latter's son-in-law 
Hieronymus Seller. But his connection with the house of Welser broke 
off in a bitter dispute in which the Welser appears to have come off 
worst. Hieronymus Seiler had much to put up with from his father-in- 
law on account of this. But since this time Ducci was generally feared 
on the Antwerp Bourse, and his desire for business and his pride in- 
creased more and more. He kept up his connection with Seiler and 
Grimel, who had left the Welser firm. We have already narrated the 
various kinds of new complications which came out of this. 

Not unjustly was Ducci pointed out as the originator of all these 
questionable excesses and abuses which brought financial business on 
tiie Antwerp Bourse into bad repute and had then already ruined 
many well-to-do merchants. An occurrence in 1540 caused a great 
sensation. In this year Ducci had contrived a monopoly (not further 
specified, presumably an artificial tightness of money, such as he un- 
questionably produced later) to ruin the agent of the King of Portugal, 
who in fact got into sore straits. The affair came to the ears of the city 
authorities, who forbade Ducci to go to the Bourse for three years. He 

His name is also spelt Gasper, Gaspar oder Jasper Douche, Douchy, Duchy, 
Dozzi, Duel, Tutzy, and BO on. 

* Of. G&uud, Un prods cel&re aw XVI" siicle in the Compte-Rendu de la Com- 
missions d'hidaire 4, Ser. XV, 307 ff., and papers to the SeUer-Neidhart-Grimel 
suit in the Augsburg archives. 


did not, however, have to endure this penalty to the full, for in 1542 he 
had business relations with the Brussels Court. There he could not 
have carried on without going on change. 

In 1542 he was the general collector of the fees for the letters of safe 
conduct issued by the Netherlands Government for exceptional permis- 
sion to trade with France. Ducci used the short time during which he 
collected these fees to remit large sums of money on his own account by 
Hieronymus Seiler to Lyons, where they probably were lent to the King 
of France as was the case later. The affair was discovered and the money 
confiscated. Since the Welser had a share in it, Seiler did not disclose 
his principals and Ducci, who then was also suspected, only paid a 
small part of the loss, and Seiler had to bear the greater part himself. 

Before this Ducci had got into high favour with the Emperor of the 
Netherlands Court by obtaining for them on the Antwerp Bourse in a 
number of separate sums loans on bonds of the Receivers General of not 
less than one million Carolus gulden at 12 per cent. - a comparatively 
cheap rate. Certainly he got an extra J per cent, for 30,000 Carolus 
gulden, and 1 per cent, for a further 300,000 since he had to raise the 
former a month and the latter six weeks before paying it out. But all the 
same it was a considerable service that he thus performed. In addition 
he contributed 20,000 Carolus gulden to the non-interest-bearing loan 
made by the merchants for the defence of the country. This was the 
highest amount paid by an individual. 1 

By these means he succeeded in thrusting Lazarus Tucher from his 
position of chief financial agent of the Netherlands Government. Ducci 
acted as intermediary in by far the greatest part of the Government 
loans in Antwerp during 1542 to 1549. Undeniably he served the 
Government well, for the rate of interest sank first to 11 per cent, and 
then to 10 per cent., and later he obtained small amounts at 9 per cent. 
Only temporarily in 1544 the rate rose to 16 per cent. In 1543 Ducci 
further recommended the introduction of a new export tax of 10 per 
cent., which he then farmed himself. The tax brought in considerable 
sums, but increased the hatred of the merchants of Antwerp against the 
man who invented it. The same result followed when in 1544 he outbid 
the former farmers of the alum import and in conjunction with 
Sebastian Neidhart, Alexius Grimel and their associates took over the 
lease against an advance of 100,000 fl. 

In such circumstances it is not surprising that he was as well thought 
of in Brussels as he was badly in Antwerp. He was made an Imperial 
Counsellor, he bought the beautiful estate of Hoboken near Antwerp, 
and married into a most respected Netherlands family. But his con- 
flicts in Antwerp increased continually. He was accused of having 
i Lille, B. 2430, 2436 and others. 


slandered to the Regent two rivals, Francisco Juliani and Francisco de 
Baros, and caused them to be punished, that he had even had an attack 
made on Baros' life by hired bravos, so that Baros had to leave Antwerp. 
Then it is said he boasted that he had procured the condemnation of 
Baros by means of bribery and so mocked at the Court. Further, he had 
instigated men of bad repute to seize with pikes and halberds the house 
of Marie van der Werwe, a lady of one of the- foremost families of 
Antwerp. He always had 15 to 20 bravos in his pay, which made the 
streets unsafe. This was so well known that even the little children ran 
behind Ducci's creatures, to whom he gave instructions to kill one, to 
mutilate another, to give a box on the ears to a third. In short, he 
assumed a right of punishing and at the same time boasted that he 
could do what he liked without any expectation of punishment himself. 
This unheard-of behaviour aroused general popular indignation, and 
Gillebert van Schoonabeke (the great Antwerp builder with whom 
Ducci, although related to him by marriage, had quarrelled, at the 
beginning of 1545) became the popular mouthpiece in the address to the 
magistrate we have already mentioned. 

Schoonabeke was then keeper of the public scales. A dispute which 
at first was of no importance arose between him and Ducci as to the 
method of weighing alum. Other matters embittered the dispute, and 
one day as he left the Bourse Schoonabeke was attacked by two of 
Ducci's men with naked weapons. He thought that he would certainly 
have been killed if his servant had not thrown himself between. After 
that he only dared go out with an armed guard. The Ducci had 
threatened him with such a beating that he would have to keep to his 
bed for four months. He had even recently sent him an insulting 
message through Lazarus Tucher, who wished to compose the quarrel, 
that he still had in the town the servants who had made the attack and 
that Schoonabeke had better look out. 

The complainants did not merely call Ducci a notorious seeker of the 
quarrels, but also 'a Florentine who plays the hypocrite well, but neither 
forgives nor forgets till death,' a hater of God and men, enemy of all 
good, liar, intriguer, and in short the worst fellow in the world. 

But all these complaints were fruitless. In spite of being summoned 
five times Ducci did not appear before the Town Criminal Court 
(Vierschaere) and finally obtained an Imperial prohibition. Since the 
Court had meanwhile banished from the town the people who had beer 
set on by the Italian, Ducci accused the magistrate of having done this 
out of enmity for him, and a new quarrel arose. 

How much Ducci was looked up to in Court circles after all these 
scandals which attracted great attention is shown by the fact that th< 
foremost members of the Netherlands nobility, such as Philippe de Croy 


the Duke of Arschot, Maximilian d'Egmont, Count von Buren, and 
many others, were entertained by him. 1 

In business too Ducci's position was as important as it was peculiar 
and many sided. First he was the most important financial agent of the 
Emperor and the Netherlands Government in Antwerp, secondly he 
carried on an extensive business as a capital broker on the Antwerp 
Bourse, thirdly he acted as agent in large financial transactions for foreign 
business houses, with whom he corresponded directly, and fourthly he 
was a banker on his own account and director of financial syndicates. 
The importance of his activities can be gathered from the fact that, 
for instance, at the end of 1546, the Fugger had a claim against him 
for 43,200 pounds Flemish (= 259,200 Carolus gulden). On the other 
hand, at need he lent them equally large sums, and from other South 
German firms. In 1545 he is represented as owing the Haugs 12,600 
pounds Flemish, while later the Fugger turned out to be the real debtors. 

In addition to these many-sided businesses there was another, as 
interesting as it was dubious, which finally proved fatal for Ducci. He 
carried on a large arbitrage business with Lyons. We have already 
described the technique of this. The transactions were made on the joint 
account of Sebastian Neidhart, Alexius Grimel, Gaspar Ducci, and 
Simon Pecori; but Ducci was the soul of the business. Anyhow, he 
instructed his partners in the art of making money tight. The con- 
scientious scruples of the German partners were quite foreign to him. 
According to them he was just as avaricious, high and mighty, ungrate- 
ful and untrustworthy, as the whole population of Antwerp thought 
him. Ducci's part in the whole affair was in every way very suspicious. 
At the beginning of 1545 Stephen Vaughan, an English agent, wrote 
from Antwerp to Henry VIII that Ducci had been summoned to the 
King of France to get him money, and he was pro-French like all the 
Italian merchants in Antwerp. The latter statement is palpably wrong, 
and Ducci was only pro-French so far as his monetary interests were con- 
cerned. He did not begin to be a traitor in this year, if he sent money 
to Lyons which there would be lent to the French Crown. For during all 
this period there was outwardly peace between the Emperor and France. 
But it was going far for the privileged financial agent of the Court of 
Brussels, an Imperial Counsellor, not to find it incompatible with his 
position to give assistance to the Emperor's bitterest enemies. Yet in 
1550 the whole company were only officially condemned for usury and 
monopoly. We have already described the course of the proceedings and 
how, although Ducci in the end got off better than his companions in 
fortune whom he had led astray, yet his part as a financier was over. 

Of his later life all we know is that what he had so often done to 
1 Gairdner, Col., voL XX, 875. 


others befell him. He was treacherously wounded. Soon after he must 
have lost his fortune, for in 1560 he made over all his rights on the Lord- 
ship of Hoboken to Melchior Schetz. Guicciardini, who in the 'sixties 
wrote his excellent book on the Netherlands containing full details of 
the merchants and bankers of Antwerp, does not say a syllable about 
Ducci. Other sources only say that he died about 1577. 

The Bonvisi of Lucca. The merchants of Lucca were among the first 
of the Italians who crossed the Alps for the purposes of trade. By the 
thirteenth century they are frequently mentioned as merchants and 
bankers in England as well as at the fairs of Champagne, and unlike the 
Sienese they managed later to retain a respectable share in this business. 
At Bruges they formed a separate 'Nation,' at the Geneva fairs they 
played a prominant part, and they understood how to maintain their 
position at Antwerp and Lyons in the sixteenth century. In finance, 
where the Florentines, Genoese or South Germans worked with the full 
force of their large capital, the merchants of Lucca certainly fell into 
the background. But their cautious neutrality made it possible for 
them, even at the time when Europe both politically and industrially 
was divided into two hostile camps, to keep in with both. In England 
they repeatedly attained the lead, and later on in France too, when the 
Florentines there had more or less retired from business. In Antwerp 
they outlived most of the other Italian trading houses. This seems 
chiefly to be due to a wise moderation in acquiring and serving. The 
Bonvisi in particular were typical from this point of view. Unquestion- 
ably during the whole of the sixteenth century theirs was by far the 
most important of the Lucca trading houses. 

By 1505 the Bonvifii are mentioned in England. For decades they 
were among the Italian merchants who paid interest on large sums of 
money to Henry VIII, till towards the end of his reign the position was 
reversed and they on their side granted him substantial loans. Next to 
Lorenzo it was Antonio Bonvisi who was highly regarded under Henry 
VIII. He helped the advance of science, was a true friend of Sir Thomas 
More and Cardinal Pole, and an opponent of the Reformation. When 
after Henry VIII's death the Reformation took a very decisive course 
in England, Antonio Bonvisi went back to Antwerp. There in 1555 Sir 
Thomas Gresham had financial transactions with him for the English 
Crown. In the same year the friendly spirit and straightforwardness 
which he exhibited in this business was praised in contrast with 
Gresham's avarice and stinginess. The financial relations of the Bonvisi 
with the FingliBh Crown continued until the reign of Elizabeth.* 

1 Brown, Calendar, 1, 346; VI, 265. Brewer, Calendar, n, No. 1364; HI, No. 64; 
IV, No. 2212; V, p. 1716; Green, Calendar, Add. 1647-65, p. 436. Aet of the Privy 
Council, 1, 396, 479-80. Turnbull, Calendar, Queen Mary, p. 197, 199, 212-13, 367, 


They were among the first Italians to settle in Antwerp, where in 
connection with cloth and silk businesses we find mentioned in 1517 
Martino, in 1529 Martino and Ludovico Bonvisi (the latter also in 1542), 
in 1521-6 the firm of Niccolo Bonvisi & Co., which had Bernardo 
Cenami as partner and chief representative. Apparently they kept clear 
of monetary transactions with the Emperor and the Brussels Court. So 
they did not lose their credit in the great crises of 1557 and 1575. On the 
contrary, in 1579, when Antwerp had lost most of its importance, they 
are described by an agent of the Fugger as one of the trading houses 
remaining there which had by far the best credit, the Fugger naturally 
excepted. 1 During the whole of the sixteenth century the Bonvisi were 
established in Lyons. Here they participated prominently in the 
financial business of the French Crown. But all we know for certain is 
that Antonio and the heirs of Ludovico Bonvisi had a claim against 
Henry II of 39,925 ecus in 1553 and 121,023 ecus in 1557. . 

At last only the branch in Lyons remained. There in 1629 the firm 
failed with liabilities of 700,000 ecus. But the cause of this catastrophe 
does not appear. The date points to a connection with Spanish 
finances, in which in fact the firm at last appear to have taken a 

Other Merchants from Lucca. Apart from the Bonvisi and the 
Cavallari who were associated with the Florentine house of Frescobaldi 
and disappeared soon after its fall, there is only one other Lucca mer- 
chant to be mentioned in connection with England. This was Acerdo 
Velutelli, who played an important part during 1570 to 1576 as a re- 
tainer of the Earl of Sussex and representative of the Florentines estab- 
lished in France and the merchants from Lucca and Genoa in Antwerp. 
But he is not mentioned any more. He and the Genoese Horatio 
Pallavicino were the last Italians employed to any considerable extent 
in the financial affairs of the English Crown. After the Bonvisi the 
Cenami were presumably the largest Lucca business house. 3 In 1553 
their collapse was announced in Antwerp, where Bernardo Cenami is 
mentioned in 1521 as representative of the Bonvisi and Bartolomeo 
Cenami founded his own firm. But after this the family was prominent 
in Lyons. In 1553 Bernardo Cenami with his compatriots the Bemardini 
had a claim of 27,725 ecus against the French Court. Unquestionably 
the firm then remained in connection with the French financial adminis- 

1 Sanuto, Diarii, XXHI, 563. Of. Guicciardini, Descritt. d. Paeri Batsi, edn. 
1681 , p. 127, Antwerpener Schoffenbriefe and Fugger Correspondence. Thys, Histor. 
d. stratum, v. Antwerpen, 2 ed. p. 502 ff. 

' Brown, Calendar, HI, 177. Buoys, Histoire de Lyon, p. 458; Behaim, Corre- 
spondence in German. Museum and Fugger Correspondence. 

1 Correspond, dipl. de la Moth* F melon, IV, 117; V, 148; VI, 9, 425. Kervyn de 
Lettenhove, Negoc. Dipl. des Pays-Bos et de VAngletem, VIII, 175. 


tration, but they are not mentioned as having a foremost position till 
after 1586, especially during the period 1593-7. In these years a Cenami 
with Gondi Zametti and others, was one of the most important tax- 
farmers and 'Partisans' in France. Cenami and Zametti often operated 
together, apparently also frequently for the Grand Duke of Tuscany, 
who, relapsing into the business of his forbears, lent large sums to Henry 
IV. But when Henry was secure on the throne, Sully thrust aside 
Cenami with the other old 'Partisans.' 

This makes it all the more remarkable that the family reappeared 
again under Mazarin. They were favoured by him and the Queen' 
Mother Maria de Medici. When, after the death of Louis XIII, Mazarin 
ruled France quite alone, a Cenami was, after Herwart, the most im- 
portant Court banker, and, what comes almost to the same thing, 
Mazarin's private banker. It is expressly mentioned that he lived in 
Lyons. Mazarin had deposited large sums with him which were 
confiscated at the time of the Fronde. Before 1653 Cenami went 
bankrupt, and Mazarin lost 413,000 livres. He is not mentioned any 

The Arnolfini, another Lucca family, were represented in Antwerp in 
1517 by Gaspar Ducci. In 1525 they bought a house of the Frescobaldi, 
and in 1579 they were one of the few trading houses of note which still 
remained in Antwerp. For many decades the firm was called Bonaven- 
tura Michaeli, Jeronimo Arnolfini and Companions, later (1556-79), the 
heirs of Bonaventura Michaeli and Jeronimo Arnolfini. Their financial 
business in Antwerp was unimportant. But the Arnolfini in Lyons and 
their firm undoubtedly in 1553 in Lyons took up 17,675 ecus in the 
French Crown loan. They are mentioned in Lyons in 1576; we do not 
know their further fortunes.* Other families of Lucca like the Balbani 
and the Deodati only occasionally engaged in finance. Yet in the case of 
the Balbani there is the same development as in the Bonvisi and 
Cenami. For a long time Giovanni Balbani was highly respected and 
carried on in conjunction with the Diodati a large sugar refinery in 
Antwerp, where the firm failed in 1566. It appears to have been re- 
established, but after that the Balbani were no longer of importance in 
Antwerp, but they are mentioned in Lyons in 1590. They were then 
entrusted with the care of the carriage of letters and dispatches of the 
Spanish Crown between Spain on the one hand and Flanders and Italy 
on the other, and they complained that the post was opened by the 

tArrfa du Conseil d'Etot de Henri IV, 1. 1, Noe. 51, 402, 490, 604, 1482, 1744, 
2186, 2351, 2549, 2685, 2942, 3039, 3109, 3329-30, 3428, 3497. Oeeonomies royales 
de Sully (Coll Petitot, HI, 11, 68; VII, 159). 

Corresp. dipt, de la Mad* Fen&cm, IV, 117; V, 148; VI, 9, 425. Kervyn de 
Lettenhove, Negoc, dipl. des Pays-Bos et de I'Angleterre, VHI, 175. Veluteffl wird 


French Government, which had a special office in Lyons for this pur- 
pose. 1 

Under Henry III and Henry IV Sardini of Lucca is named as a great 
'Partisan,' but he was not so important as Diaceto, Rucellai, Gondi, 
Cenami, and Zametti. z 

Zametti, the most important financier of Henry IV, also came from 
Lucca. In 1594 he acquired the bank of the Capponi, the last Floren- 
tine house in Lyons, and after that had uncommonly large loan trans- 
actions with the King, who had by then established his position. The 
largest of these was one of 700,000 ecus in 1598. Zametti was often 
associated with Cenami, but often worked without him. Zametti was of 
low origin, but his descendants played no insignificant part in France. 
For instance, one of his sons was Bishop of Langres. 8 

The Affaitadi of Cremora. The Affaitadi of Cremona are among the 
first Italians who tried to take part in the direct trade between Lisbon 
and the East Indies. Giovanni Francisco Afiaitado was already in 
1501-3 of some importance in Lisbon.* When they were debarred from 
the direct trade with the East Indies the AfEaitadi were again among the 
first to conduct large contracts for spices with the King of Portugal so 
as to secure for themselves at second hand this profitable monopoly. 
For this purpose they had an important factory in Antwerp, which from 
about 1525 was managed by Tommaso degli Affaitadi. His sons 
Giovanni Carlo and Giovanni Baptista became highly looked up to. 
The former was called Chevalier, Seigneur de Gbistelles (he purchased 
this latter in 1545); Baptista was even 'Count.' About the middle of the 
century they were the chief shareholders in a large syndicate that 
bought from the King of Portugal the whole cargo of spices of his 
East Indian fleet, and paid trim large advances in respect of it. 6 During 
the period 1542-58 the AfEaitadi are frequently mentioned as credi- 
tors of the town of Antwerp, the English Crown and King Philip. 
They also appear for a time to have had a share in the lease of the 
Netherlands alum monopoly. But these engagements were never very 

1 Kervyn de Lettenhove, I.e. IV, 363. Pericaud, Notes at documents p. servir A 
Vhistoire de Lyon sow le rigne de Henry III, p. 16. Of. also Thys, Histor. d. straten 
v. Antw. passim. 

* Journal de 1'Estoik (ColL Petitot), 1, 102, 313. Arrfo du ConseU d'Etat de 
Henri IV, t. I, No. 42 ff. bis No. 4654. 

* Arrets du CanseU d'Etat de Henri IV, t. I, NOB. 690, 2572, 3329, 3428, 4254, 
4483, 4633, 4990, 5121, 5258, 5328. Oeconomies royales de Sully, H, 208; III, 89, 
103, 191, 205 u. s. f. Cf. Memoires of I'Stoile and Bassompierre. 

Cf. the French later edn. of Heyd, GesMchte des Levantehandels, U, 512-14, 
526, 551. 

* Handhmgsbticher der Affaitadi im Konigl. Staatsarchive at Brussels; Lille, B. 
2616; Antw. Stadsprotokotten ed. Pauwels, I, 33. Bulletins de la Propriett (Antw.) 
1887, p. 15; Green, Calendar, Add. 1547-65, p. 436; Eugger-Archiv 2, 5, 12. 


important, and in 1575 it is expressly stated in one of the Fugger com- 
mercial letters that the AfEaitadi had nothing to do with the Spanish 
Crown. But all the same they got into difficulties two years later and 
had to ask their creditors for a moratorium of six years in which to dis- 
charge their liabilities. This is the last we hear of them. 

The Last Italian Financiers in France. In 1584 when the French 
Gabelles were going to be farmed out, two syndicates,the first Parisian 
and the second Italian, Ramelti of Turin, who for some years had been 
active in French financial business, negotiated on behalf of the Italians. 
He offered to pay out the claims of the former lessees of whom Gondi 
was the most prominent, amounting to 800,000 ecus. The Florentine 
envoy who reports this adds that he will get the bargain, since the 
French could not produce such a large sum. In fact the loan was trans- 
ferred to the Ramelti's syndicate, partly through the influence of the 
Duke of Epernon. 1 But the observations were just. For under Henry 
III Vidiville is the only person with a French name in the foremost ranks 
of the 'Partisans.' Two more-Le Grand and De rArgenterie - are 
added in the first years of Henry IV. Under Sully this development pro- 
gressed further; meanwhile Sully tried to rob the 'Partisans' of their 
power by wise economy. Under Louis XIII so long as Concini, the 
Marechal d' Ancre, bore sway and then again under Mazarin the Italians, 
protected by Marie de Medici, obtained new influences. And, what 
had never happened before, Mazarin handed over the direction of the 
finances to an Italian, Jean Particelli, Sieur d'Emery. In addition to 
Cenami and Herwart, several Italians, Vanelli, Cantariniand Serantoni 
(we do not know what towns they came from), acted as chief bankers 
for the Grown and Mazarin. But numerous Frenchmen are mentioned as 
Partisans. They were mostly of low origin, in particular Court lackeys. 
They associated together and worked in the main with the money of 
private people to whom they paid interest.* 

The popular hatred of the Italian favourites, which in Catherine de 
Medici's time had repeatedly led to outbreaks, broke out under Marie de 
Medici in 1617 and caused the fall of the Marechal d' Ancre. Then it in 
1648 greatly strengthened the Fronde against Mazarin, since which time 
Italian names entirely disappear from French finance. This is rather 
earlier than the last offshoot of the South German financial magnates, 
Herwart, who lasted on till the early days of Colbert. There did not 
remain much more for Colbert to do in nationalizing French financial 
administration. The French who replaced the Italians inherited both 
their technique and the hatred of the populace, who gained nothing 
from having driven out the old masters of finance. 
1 Desjaidins, IV, 607 &. and cf. IV, 430, 494. 
* Korean, Choix det MazaHnadea, 1, 113; Defense de Faaquet paesim. 




'THE Rise of Antwerp. Antwerp is one of the many cities whose 
* favourable situation for world trade was only fully exploited at a 
late stage. Since the beginning of the fourteenth century it had been a 
market of some importance with two fairs a year, attended by mer- 
chants from England, Italy, and the Hansa towns, but the city grew 
very slowly till the middle of the fifteenth century. There was a great 
trade in commodities between the Mediterranean cities, which controlled 
the Levantine commerce, and the whole of Northern Europe, where the 
German Hansa towns monopolized the trade. This trade in commodi- 
ties, together with the international dealings in bills and money, was 
concentrated in Bruges. The transfer of the centre from Bruges to Ant- 
werp was brought about by a combination of political, economic, and 
other causes and occupied nearly a century. The first great movement 
of foreign merchants from Bruges to Antwerp took place in 1442, and 
even in 1533 Bruges had not quite lost its international importance. 1 

The silting up of the Zwin which hindered the loading and unloading 
of sea-going ships in Sluys, the port of Bruges, might perhaps have been 
got over, but this was prevented by the long and sanguinary disturb- 
ances of which Flanders was the theatre after 1482. These made it im- 
possible for foreign merchants to stay in Bruges, while the rulers did all 
they could for Antwerp, which was already favoured by nature, in order 
to punish the rebellious population of Bruges.* 

Before this time the English, whose already great privileges were 
largely extended in 1446, had raised their trade in cloth to be one of the 
most important branches of Antwerp's business. Now, on the discovery 
of the sea route to the East Indies, the agent of the King of Portugal 
introduced the spice trade, which soon gave a distinctive character to 
the Antwerp trade, and an ever increasing number of Portuguese, 
Spaniards, South Germans and Italians settled permanently there, 
whereas before they had only visited the fairs. 8 

1 Papebrochius, Annatea Antwerp, I, 414; Gilliodts van Severen, Compte-rendu 
de la GommMm d'histoire, Ser. 4, voL 7, pp. 216, 233, 272. 

* Schanz, Engl. Handdspolitik gegen Snde des Mittdaltera, I. 8 fi. Guiociardini, 
Deacntt. di tutti i Poesi Bossi, 1567, p. 84. Bertijn, Chronyckder Stodt Antwerpen, 
ed. 1879, pp. 49, 52; Veiaohter, Inventaire des Charles d'Anvers, NOB. 580, 581. 

The merchants ofNuremberg received privilegesforBrabantalsoml432,1433, 
and 1468. Antwerp is mentioned in that of 1433, in that of 1468 only Ghent, 
Bruges and Ypres. The first South German visitors to Antwerp are mentioned in 
1477. Of. also Ghillany, Geschichte d. Seefahrers Hitter Martin Behaim, pp. 24, 102, 
104. The Florentines moved from Bruges to Antwerp 1512-18, the Genoese mainly 
after 1522. The Portuguese agent is first mentioned in Antwerp 1494. Guicciar- 
dini, Descritt. d. Paesi Bassi, edition of 1581, p. 126, 


Now, in the comae of four decades Antwerp developed into a trading 
centre such as the world has never seen before or since; for never since 
has there been a market which concentrated to such a degree the trade 
of all the important commercial nations of the world. An English 
memorandum of 1564 says that the men of Antwerp had 'eaten out of 
their trade' the merchants of the other towns. This is quite correct if 
instead of the men we put the city of Antwerp, for the market attracted 
to itself the trade of the other markets, and their merchants settled in 
Antwerp to obtain the extraordinary advantages offered them there. 
The natives, on the other hand, were only of secondary importance. 
They had comparatively little commerce on their own account, as a 
Venetian envoy remarked in 1525, but occupied themselves with sub- 
sidiary trades. They helped the foreigners by acting as brokers, agents 
for warehouses, later also as bankers, agents, etc. Wholesale trade pro- 
per was, both in Bruges and Antwerp, chiefly in the hands of foreigners. 1 

What now were the extraordinary advantages of Antwerp? What 
was there specially to distinguish, it from Bruges? 

The Importance of Antwerp in General. Antwerp took the place of 
Bruges as the metropolis of the trade of Northern Europe, but even a 
superficial view shows important differences between the commerce of 
the two cities. Among the foreign merchants trading at Antwerp some 
nations were much less strongly represented there than at Bruges: for 
instance, the Venetians whose role in the world's trade was now played 
out; then, the Florentines, who kept away from political reasons; the 
'Osterlings, 'at any rate the merchants of the Baltic, who in part suffered 
the same fate as the Venetians, and in part from an early date were con- 
nected with Amsterdam, already in the sixteenth century more import- 
ant for the Baltic corn trade than Antwerp. Antwerp was accordingly 
all the more frequented by inhabitants of the North German North Sea 
cities and those of the North of the Low Countries. The chief influx, 
however, consisted of merchants from Portugal, Spain, England, and 
South Germany. 

The English now first betook themselves to active trading and 
Antwerp served as far their most important staple. Spaniards and 
Portuguese were brought in shoals by their large colonial undertakings. 
The alteration of the centre of commercial gravity which told against 
the Venetian and Baltic merchants made the North Germans visit 
Antwerp in great numbers. They had previously dealt chiefly with 
Venice, but had played only a small part at Bruges. In Antwerp, on the 
other hand, thanks to the amount of the capital they held and their 
enterprising spirit, they kept the chief place for many decades. A 
similar development can be traced in the case of the Genoese. 
Sloane MSB. 818. AlWri, Beta*, d. Ambaac. Fenefc, IV, 22. 


If we penetrate a little farther, we note that the foreign merchants 
dealing in Antwerp represented a far greater proportion of their 
countrymen than in Bruges. Here we think of the important develop- 
ment which has led to the system of dealing on commission. In the 
Middle Ages the merchant at first travelled in person and then, since the 
Crusades, he had sent his agent. Now, in Antwerp we meet, not oily 
agents representing different business houses, but also an innovation, 
foreign merchants permanently settled in Antwerp who had a business 
connection with a whole group of their fellow-countrymen. We find 
the same thing occurring in the Netherlands also. It is rather astonish- 
ing to find in Antwerp in the early sixteenth century the quite modern 
type of the English broker, both broker and commission agent, which 
has only just began to be usual in Germany in quite recent times. 1 

In order to show the scale of the business done by foreigners in 
Antwerp as compared with Bruges, we have only to turn our attention 
to the two great branches of the Antwerp trade, East Indian products 
and English cloth. In earlier times the East India trade had branched 
out from the Levant into many different channels; now for the greater 
part it flowed in one stream to Lisbon and thence to Antwerp, for the 
King of Portugal sold the cargoes as a whole to large rich syndicates who 
obtained a monopoly and took care that, in order to keep up prices, the 
whole trade should be concentrated in Antwerp. 8 For the same reasons 
the English managed their cloth trade in the same way. For this reason 
too most other commodities were concentrated in Antwerp and their 
quantities were correspondingly increased, e.g. we note that South 
German fustian, an important article in the world's trade, was only now 
produced in a wholesale capitalist manner for export; or, to take 
another example, Hungarian copper, for which Venice had formerly 
been the chief market, had since the beginning of the sixteenth 
century been sent in large quantities to Antwerp and thence exported 
to the rest of the world. 

This tendency to progressive concentration was, however, chiefly 
manifested by the fact that the bourses of the different nations which 
had existed in Bruges were in Antwerp united with the international 

For the Genoese Desimoni e Belgrano in den Atti d. aoc. ligure, voL V,460ff., 
for the Portugese the Antwerp Jury rolls: Statutes of the Adventurers Company 
for the English, Cologne histor. Archives for the German Hansa. 

Wheeler, Treatise of commerce (1601 ), p 36: 'The Portingall - like a good simple 
man, he sailed every yeare full hungerly about 3 parts of the earth almost for 
apices; when he had brought them home, the great rich purses of the Antwerpians, 
subjects of the king of Spain, ingrossed them all into their own hands, yea often- 
times gave money for them before hand, making thereof a plaine Monopoly.' For 
English cloth, of. Ehrenberg, Hamburg und England im Zetialter der K6igin 


bourse, a point to which we shall return. The best answer to the ques- 
tions as to why the world tirade was concentrated in Antwerp is given 
by a memorandum drawn up at the beginning of Philip II' s reign by the 
foreign merchants in Antwerp as a determined protest against the pro- 
posed nomination of sworn insurance brokers. 'No one can dispute, 
they say, that the libertys granted to the merchants is the cause of the 
prosperity of this city.' 1 

The trade in Bruges had been free compared with the restrictions 
prevalent in other cities in the Middle Ages, but in comparison with 
the absolute freedom enjoyed by the foreign merchants in Antwerp 
Bruges seems mediaeval. For instance, in Bruges the brokers were a 
monopolist corporation, but in Antwerp they were free. In Bruges only 
sworn money changers could engage professionally in money changing 
or giro bank business. In Antwerp, on the other hand, the Charter of 
1306 granted this right to all burghers, and in the city's prime there were 
practically no restrictions on the trade in money, precious metals and 
bills. Clearing-house business was carried on by book transactions with- 
out ready money. The hotel and lodging-house trade, which was extra- 
ordinarily important to the foreign traders in the Netherlands, was in 
Bruges, but not in Antwerp, the subject of many stringent regulations 
on the part of the authorities. The trade restrictions which remained 
in Antwerp originated almost entirely with the foreign merchants. 
Both the ruler and the city magistracy tried to give trade all the free- 
dom possible. 

Foreign merchants had as much liberty as those of the country and no 
one of the foreign nations was more highly privileged than the rest. 
Accordingly the divisions which had existed in Bruges between differ- 
ent sections of the population fell into abeyance, at any rate in so far as 
they had originated in jealously guarded rights and provileges. Only the 
English, who had had a considerable trade in Antwerp's early period, 
kept a somewhat special position. The other nations were distinguished 
by their appearance, language and customs; but in other respects 
they formed one merchant class with identical rights, duties and 

The absence of trade restrictions in Antwerp had one very important 
consequence. It altered the significance of the fairs. 

Fairs and Bourse in Antwerp. In the fifteenth century Antwerp had 
two fairs, the Whitsuntide fair in the spring and the St. Bavon's fair, 
vulgarly the Bamas or Pamas fair (the French St. Bemy) in the autumn. 
There were in addition two other fairs whichwere held till the 'forties 
of the sixteenth century, in Bergen-op-Zoom, though they had then 
rather fallen into decay and were transferred to Antwerp. These were 
Bulletin de la Socifte de Geographic d'Anvers, p. 215. 


the Cold market at Christmas and the Easter market which originally 
began at Candlemas. 1 

The two old Antwerp fairs in the early spring and the early autumn 
were what the English merchants used chiefly for their cloth trade. 
The cloth fleets came in at these times and on their arrival the English 
held their 'show days.' It was very seldom that they visited the other 
fairs. 8 There was no important change in these arrangements while the 
English dealt in Antwerp, and even afterwards, for they were deter- 
mined by national conditions on which the English wool season as well 
as the shipping season depended. When, however, the English cloth 
trade ceased to be the determining factor in Antwerp, and the other 
foreign merchants transferred themselves in a body from Bruges to 
Antwerp, the firm structure of the old fairs was broken down. In 1484 
the Bruges Office of the Hansa towns complained that in Antwerp the 
men of Brabant held a new staple with all sorts of goods and booths 
the whole year through not only at market times. Two years later it 
was said that the people of Antwerp had begun a new market with the 
English and now wanted to do business out of season. 3 As far as the 
English were concerned, the alteration was not followed up. The im- 
portance of fair time in the Middle Ages consisted in the temporary 
suspension of the restrictions on the trade of foreign merchants which 
took place at these times. In Antwerp, since trade was free all the year 
round, the fairs lost much of their importance. 

The other reason which had made fairs necessary in mediaeval times 
also became obsolete. Trade had grown till it was sufficient to keep up 
a regular market all the year round. Another important alteration is 
closely connected with this growth of trade. Many commodities were 
now made in standard types which served as a basis of trade, and others 
were only dealt in from samples. In both cases the goods were not seen 
before the transaction was concluded. The result was the conversion of 
Antwerp from a fair centre to a bourse centre. 

Bruges also had its 'Burse,' the first that bore the name. This, how- 
ever, was not a bourse in the modern sense that is a meeting place for all 
merchants, it was the meeting of the Italians who had their consular 
houses in the Bourse Square. Each of the other nations had a separate 
assembly. The Bruges Bourse was chiefly used for dealing in money and 
bilk; the trade in commodities was carried on either in the large 'Halles' 
or in the houses and warehouses where the goods were stored. 4 

Cf. Vaughan'a Report to CromweU, 1534; and Brewer, Cdendar, voL VTI, 575. 
For later times Guicciardini, Descritt. d. Paesi Bassi (1567), p. 83. 

Schanz, Engl. Handdspolitik gegen Ende dea MitteUtUers, I, 12. 

> Haneerecesae ed. Sehafer, I, 399, II, 25. 

4 Cf. Ehrenberg on broken, lodging-house keepers and the Bourse in Bruges 
from the thirteenth to the sixteenth century. Ztschr. f. Handdorecht, voL XXX. 


In Antwerp in the second half of the fifteenth century there was a 
merchants' bourse. When the trade boom began, apparently in 1460, 
the Antwerp City Council set it up close to the Great Market in the 
English or Wool Street, where the English had their pack houses; this 
was also close to the port, the public weighing place and the money 
changers' banks. This was done for the express purpose of furthering 

An institution of this kind, set up by the authorities for a certain 
purpose, was an important innovation. It is still more important that 
the Antwerp Bourse was meant from the first for all trading in Antwerp. 
This is proved by the inscription on the splendid new bourse erected in 
1531: 'In usum negotiatorum cujuscunque nationis ac linguae.' The 
English alone, at any rate in later times, had a special bourse; and this, 
as Guicciardini remarks, gave rise to a remarkable division of business, 
not according to nations, but according to transactions. 8 

'The merchants,' Guicciardini says, 'go morning and evening at a 
certain time to the Bourse of the English. There they do business with 
the help of brokers of every language, who are there in great numbers, 
chiefly as to the buying or selling of commodities of every kind. Then 
they go to the new Bourse, where in the same way they deal chiefly in 
bills and money loans (depositi).' 

We need not inquire here whether all dealing in commodities in 
Antwerp when of a bourse-like character took place on the English 
Bourse. It is sufficient to establish the fact that all nations when they 
had bourse business to transact had to visit one of the two bourses. 
Within the new bourse the different nations feU into divisions, as also 
happened later on in Amsterdam. The Antwerp bourse was the first 
international or world bourse in the full sense of the word. A contem- 
porary poet, Daniel Bogiers, describes the business in the new bourse: 
'A confused sound of all languages was heard there, and one saw a 
parti-coloured medley of all possible styles of dress; in short, the Ant- 
werp Bourse seemed a small world wherein all parts of the great world 
were united.' 

Generally speaking, Antwerp in the sixteenth century must even to 
the outward eye have been an incomparable city. The splendid luxury, 
often united with fine artistic feeling of a number of merchants who 
came together from every quarter of the globe, made much money, and 

1 Verachter, No. 704. Thys, Histor. der Strata* vm Antwerpen, 2nd Ed., 1893, 
p. 92fi. 

Desmtt. <L Paesi Baasi Ausg., v. 1581, p. 171. Mortens en Torfs (Quchied. v. 
Antw., IV, 188); Henne (Rtynt, de Charles Quint en Bdgique, V, 319). Sohanz (Engl. 
Bemdekpolitit, 1, 14) puts the creation of the English Exchange in 1515, while 
Guicciardini (Ed. v. 1581 , p. 102) and Thys (2. Ausg. p. 86) put it as 1550 (Schanz, 
II, 231). 


in the manner of the time, and especially the population among whom 
they lived, lost no opportunity of making display and joyful celebra- 
tions - all this made a life such as the world has never again seen. 1 

The four fairs at Antwerp continued, but lost most of their import- 
ance for business in commodities properly speaking, with the exception 
of the English cloth trade. The payments of the fair which had been 
an appendage became the matter of chief importance. This is clearly 
proved by the fact that in the case of the two fairs at Bergen-op-Zoom 
only the payments were moved to Antwerp, the fairs themselves re- 
mained in Bergen, though no business was done there. The fair pay- 
ments were to begin on the 31st October, or the 31st January, on the 
1st May and on the 1st August, and to last ten days in each case. 
Later these developed into four quarter days: 

10th February for the Christmas market. 

10th May for the Easter market. 

10th August for the Whitsuntide market. 

10th November for the Bamas market. 

Finally these quarter days were often prolonged, if fiscal necessity 
made it desirable. In this case it was a question of quarter days for the 
entire business in bills and loans, whether for private or public ends. 
The payments for commodities were made separately a month later. 
Apart from the payments at fair time money was usually scarce and 
dear; and far the largest part of the gigantic dealings in capital in 
Antwerp was accordingly transacted at the quarter days. This was not 
carried out as in Lyons by clearing-house methods, but by assignment 
from hand to hand -a still more imperfect form of clearing-house 
business which gave rise to many lawsuits. 2 

Speculation in Antwerp. We cannot here enter into the technique of 
the Antwerp trade. In order, however, to understand what follows It is 
necessary to show how extremely speculative was the trade in the chief 
articles, East Indian spices. Among these pepper was the most im- 
portant and the most risky. The pepper trade was a prerogative of the 
King of Portugal, who sold the cargoes of the East Indian fleets to large 
syndicates who thereby obtained a monopoly at second hand. They 
often bought the cargoes while still at sea, gave the King of Portugal, 
who always needed money, large advances, and repaid themselves by 
charging a high price. They were able to regulate the price in their own 
interest in Antwerp, where the bulk was disposed of, at any rate till the 
arrival of the new fleet from the East, which then set the price. 

1 Kervyn de Lettenhove, Belat. polit des Pays Bos et de I'Angleterre, H, 596 ff . ,61 1. 

a speech of the Venetian Senator Contarini in 1584, quoted in Lattes, Liberti 
deUe Banehe a Venezia, p. 121, die Coutumes de la vide d'Anvers, U, 522 &., and 
the Imperial Edicts of 1537 and 1539 in the Place, v. Brabant, I, 511, 513, 515, 


These two factors, the interest of the large syndicates and the 
amount of the new imports, determined the price of pepper on the 
Antwerp Bourse. Both were incalculable, as were all the other contri- 
butory conditions, of which war and peace were the most important. 
The course of prices was often therefore very 'jumpy' and speculation 
had an hitherto unparalleled opportunity. This was made the more 
important by the fact that the price of pepper determined most of the 
market by acting as a barometer for the temper of the bourse. 1 The 
conditions of the business in many other commodities were analogous, 
e.g. the importation of alum was a prerogative of the Netherlands 
Government, which fanned it out to syndicates of merchants. Other 
branches were treated at times as practical monopolies, which were then 
broken down, giving rise to extravagant fluctuations, e.g. the copper 

All this contributed to make dealing in commodities in Antwerp a 
risky business for anyone who was not able to follow the market from 
hour to hour and even for those who did so. Of the abundant evidence 
on this head we will confine ourselves to the commercial reports sent in 
the years 1543 and 1544 by Christopher Kurz, a Nuremberg man, to the 
Tucher firm, by whom he does not seem to have been directly employed. 

At this time astrological prognostications flourished in the Nether- 
lands ; these were prophecies of every kind which were reproduced in 
print. Christopher Kurz had puzzled out an astrological system by 
which he said he could foretell prices. He praised his invention to the 
Tuchers, Tni^ing sober business statements with fantastic combinations 
in a way that seems absurd to us, but which probably at the time gave 
quite a different impression. Kurz writes in one of his first letters that 
Lienhard Tucher, whom we know as a much respected and able mer- 
chant prince, had shown himself disposed towards his proposals 
(though 'after many appeals and requests'). Lienhard Tucher made 
marginal notes on the reports Kurz sent which prove that he read them 
carefully and did not fail to observe the prognostications. 8 

Kurz started from the unimpeachable statement that 'trade in spices 
needs great foresight.' He said that he had found a system for fore- 
telling a fortnight in advance the prices of pepper, ginger, and saffron. 
'I sought it three years, but until this year found it not. I think God 
hath given it to me. I have observed it for the space of a year. Yet 
will I not boast myself of it, till I myself have observed it for yet a time 
longer with mine own eyes and have traced it out. Yet I doubt not, it is 

'Tucher business correspondence, 1529-46, ledgers of the Affaitadi in the 
Brussels Archives (1648-51 and 1556-8). 

'Tucher Family Archives, III, 11. For Netherlands 'Prognosticatien,' cf. 
Enuttel, Pamfletten, NOB. 86, 91-4. 


well founded; if it be not, I shall know ere a half year be out. In the 
same manner I have known how to show for the matter as touching 
cinnamon, nutmegs and cloves from one market to another. But as I 
have always seen you wary about committing yourselves with such 
goods, I have forgot some pieces of this experiment, as I write not 
of all those which I have. Still should I hear that ye would hazard with 
spice dealing, there shall be no lack of such. But ye must be diligent 
to frequent the places where such are bought and sold, as Venetia - and 
wonder seized me wherefore you use not Frankfort which lieth near to 
your hand. For there is not only good gain oftentimes to be made with 
spices, but likewise with bills can one hap on many a good chance. 
As ye have often noted in my writings to you how great an alteration 
is there here day by day in bills on Germany, Venice, or Lyons, so that 
in the space of eight, ten, fourteen or twenty days with other folks' 
money, a man may make a profit of 1, 2, 3, 4, 5, or more per cent., with 
such there is here each day great business on the Bourse. On these also 
have I my experiment so that I may foretell not only from week to 
week the Strettezza and Largezza (tightness or ease in money), but also 
for each day and whether it shall be before or after midday. I have, 
however, nigh forgot this again, since I have found you so reluctant.' 
Then he speaks once more of saffron. Lienhard Tucher had written 
that he might perhaps act on Kurz's advice as to this commodity: 
'So bethink you that the sale lies with you and buy in with all heat at 
Lyons. Truly, Honourable Sir, from such motions of the mind you 
must learn wherefore I speak my judgment in part. So soon as ye see 
how much hath from this year and how much remaineth over, and that 
now such wares be driven so high in every place that they, according to 
the store of them, cannot come higher, what course have you then to 
buy as you, I wot well would be fain to do? But this is naught for the 
upper influences so blind the natural reason with affections or desires.' 
Here he adds a long reasoned statement as to the best times for buying 

Kurz writes that he always rose before four and was surrounded 'with 
work as a man in the ocean with water, for our astrologers aforetime 
have written much, but little with reason; wherefore I trust not their 
doctrine, but seek mine own rules, and when I have them I search in 
the histories whether it hath fallen out right or wrong.' He took up 
political prophecy and gradually became an astrologer by profession 
and of great repute. Among other things he prophesied that the Papacy 
would be extinct in from 40 to 60 years' time. He could not foretell the 
fate of the city of Nuremberg till he was told the date when the first 
stone was laid 'for where no root is, there can nothing grow.' 

As to the Infante Philip, later Philip II, Lienhard Tucher sent him. 


exact details as to Ms birthday, when Kurz began to cast his horoscope. 
The result was sad, but practically the exact reverse of actual facts. 
The only thing that came out right was 'that he wasteth himself with 
his wars and therefore always becometh poorer.' Kurz regretted 'that 
the Prognostication fell out so ill; other astrologers would perhaps have 
thrown a cloak over it; but as there is nothing but sickness and povertie 
and so much of ill luck that I would not fain be Philip. Should the 
Empire have such an Emperor, which I believe not if man have com- 
plained over Ferdinand, they shall yet shriek forth complaints over 
Philip. Why should I write much in Summa? A worse Nativity hath 
not come to one this year past. Cloves (he continues, in the same breath) 
will be profitable and it could do no damage to make trial with eight or 

We have here the beginning of modern speculation in commodities 
clearly recognizable though mixed with strange medieval whimsies. 
Lazarus Tucher, whose dealings we know, was in his early days a great 
speculator in the present-day sense. Christopher Kurz is only a carica- 
ture of the type and reminiscent of many phenomena which may be 
met with in the bourses of our own day. 

First of all it must be clearly stated that a large part of the dealing in 
commodities in Antwerp was so risky that prophecies of this kind as to 
the future course of business could obtain credence even with mer- 
chants of the first rank like Lienhard Tucher. We need not attend fur- 
ther to Kurz's statement that his system was already used in many 
business houses in Antwerp. 

The speculative colouring which dealing in commodities assumed 
injured it in the eyes of many solid merchants, while the poor develop- 
ment of the technical side of speculation had the same effect on the less 
solid. The arrangements had not yet been invented which made it 
possible later to speculate in commodities without the complicated 
information, trouble and expense of actual trade. 

There is a very important opinion of fourteen Paris jurists in 1530 
as to whether the forms of business then practised in Antwerp were 
allowed by canon law. 1 It is based on data supplied by Spanish mer- 
chants resident in Antwerp. It is stated that many of the richest firms 
no longer like dealing in commodities unless all the merchants were 
unanimous in believing that there was a good prospect of profit. 
Otherwise they preferred to refrain mainly for three reasons: 

1 Eacritto quo los dottores de Paris embiaron a los sefiores de la nation espafiola 
reridentes en la ville de Emberes sobre ciertas deudas que lea embiaron a preguntar 
assy de cambios y fianpas como de otras oosas, Begun que por el dioho escritto 
e, el qual saco de latin el muy i* aeiior Dottor A 
L Hisp. 30). 


(1) It was so troublesome to export or import commodities, to ware- 
house and resell them, a process needing investigation of the buyer's 
credit, while the number of sound firms dealing in commodities was 

(2) It was too risky, for they feared to lose their capital or get it 'frozen. ' 

(3) Finally, it did not offer so good nor so sure a profit as dealing in 
money and bills. They therefore engaged increasingly in the latter. 

A few decades later Lodovico Guicciardini, a man of good economic 
sense, who in other respects was full of enthusiasm for the greatness of 
Antwerp's trade, confessed that the dealings in money at Antwerp 
were now a public danger. 'Formerly the nobles, if they had ready 
money, were wont to invest it in real estate, which gave employment to 
many persons and provided the country with necessaries. The mer- 
chants employed capital of this kind in their regular trade whereby they 
adjusted want and superfluity between the various countries, gave 
employment to many and increased the revenues of princes and 
states. Nowadays, on the other hand, a part of the nobles and the 
merchants (the former, secretly through the agency of others, and the 
latter openly in order to avoid the trouble and risk of a regular profes- 
sion) employ all their available capital in dealing in money, the large and 
sure profits of which are a great bait. Hence the soil remains untilled, 
trade in commodities is neglected, there is often increase of prices, 
the poor are fleeced by the rich, and finally even the rich go bankrupt.' 

We know that in the main this picture is a true one. The merchant 
class of the mediaeval centres mostly turned their energies to dealing 
in money. The people who were their successors, the Spaniards and 
Portuguese, did not know how to profit by this chance. They borrowed 
the capital necessary for world trade from the former and had to give 
back to them the lion's share of the profits. The trading nations of 
modem times, the English and the Dutch, had not yet laid hands on 
the heritage of the Mediterranean cities. Guicciardini' s pessimistic view 
of his own times is easily understood. 

The Beginnings of Premium Business. In the year 1541, perhaps 
before and certainly often later, the Netherlands Government forbade 
'Contrats de gageures et d'assurances des changes.' We leam what this 
was from an interesting tract of the Licentiate Ghristoval de Vilklon 
printed in Valladolid in the year 1542. 1 'Of late in Flanders a horrible 
thing hath arisen, a kind of cruel tyranny which the merchants there 

1 Provechoso tratado de cambios y eontrataciones de mereaderes, cap. XV. Verach- 
ter, Invent. No. 1642, Cmttumes de la vitte d'Anvers, II, 401 ff.; IV. 9. Belgrano in 
Giarnale ligwitico, II, 255. Bensa, II contratto di assicurazione nel media evo, p. 126, 
178 passim. (Scommesse di promozione di Cardinal!, di Sede Vaoante.) Marino 
Sanuto, Diarii, XVI, 27. Brown, Calendar, II, 176; V, 296, Codice d. Tone. Legidaz. 


have invented among themselves. They wager among themselves on the 
rate of exchange in the Spanish fairs at Antwerp. They call these wagers 
parturas according to the former manner of winning money at a birth 
(parto) when a man wagers whether the child shall be a boy or a girl. 
In Castile this business is called apuestas, wagers. One wagers that the 
exchange rate shall be at 2 per cent, premium or discount, another at 
3 per cent., etc. They promise each other to pay the difference in 
accordance with the result. This sort of wager seems to me to be like 
Marine Insurance business. If they are loyally undertaken and dis- 
charged, there is nought to be said against them. But there are many 
ruinous tricks practised therein. For dealing of this kind is only com- 
mon in merchants who, holding much capital, perhaps draw a bill of 
200,000 or 300,000 ducats in Flanders or Spain and conclude on one 
of these wagers, whereby one leaves the other free which of the two 
transactions he will carry out. By their great capital and their tricks 
they can arrange that in any case they have profit. This is a great sin.' 
We shall see later in detail what the merchants did. It is easy to see 
that here we have the beginnings of the present premium business. 
Unquestionably it was also used in dealing in commodities. We find 
in 1591 in Hamburg, which took its modern commercial technique 
from Antwerp and Amsterdam, that there is a form of business where 
one party wagers that in six weeks wheat will sink below a certain 
price. At the beginning of the seventeenth century the purchase op 
conditie, op weddinge, a condition ou gageure had already become usual 
both in Rouen and Amsterdam in commodity dealing. In many cases 
it had sprung from the original system of wagers. 1 The fact that the 
premium business originated for bill business was natural, since it was 
always of a more speculative nature than dealing in commodities. 

Traffic in Btlls at Antwerp. The Paris opinion of 1530 describes the 
Ricorsa bill in two documents between Antwerp and the Spanish fairs 
as the most usual kind of bill business. In this form it was not merely a 
veiled loan transaction, but was rather a speculation since two bill 
transactions had to be concluded which were separated both in time and 
place, the one in Antwerp, the other in Spain. There was, however, as 
well the Bicorsa bill in one document, which was purely a veiled loan. 
The first Mud, however, was much commoner, and those who wished to 
defend it against the doctrine of usury could point to the fact that 
money was as often lost as won over it. 

The speculative nature of the bill transactions is shown by many 

1 Van Damme, Manitre la plus induatrieuse A tenir Kvres, etc., Rouen, 1606. 
Henry Waningen, Tresor de tenir livrea de compte & I'ltalienne, Amsterdam, 
1648. Van Neulighem, 5oeeMode Amsterdam, 1630. Maoynes, Lex M ercotoria, 
' J *"~2,p. 144. 


sayings of the merchants. Christopher Kuiz we have already quoted. 
In 1550 the Imhofs sent to Antwerp a new agent, who wrote to his pre- 
decessor, 'If a man see profit before his eyes, he must undertake nothing 
with arbitrio unless he have orders, it turns itself about three times.' 

Arbitrage in bills, which had been much carried on in Antwerp since 
about 1540, contained three elements: (i) the wish to make money on the 
difference between the prices of bills in different places, (ii) speculation 
on their fluctuations, (iii) the wish to obtain the highest possible in- 
terest. Sometimes the one element was more prominent, sometimes the 
other, but in most cases they were all inextricably mixed, e.g. Paul 
Behaim writes that he wants to remit money to Frankfort-on-Main and 
to draw on Venice; but since money has become more liquid, nothing is 
to be got out of such arbitrio. The order to borrow money on Nurem- 
berg and to lend it out again profitably in Antwerp could not be carried 
out, as no solvent borrowers could be found. If money were to be had in 
bills on Venice at 72J gr. per ducat, he would try to lend it out in 
Antwerp at 4 per cent, for four months (= 12 per cent, per annum) 
which would mean getting 75f gr. for the ducat. Hence a bill could be 
drawn from Venice on Antwerp and get a profit of l-2 per cent, with- 
out having to tie up one's own money in the transaction. This example 
will be enough to show how bill arbitrage was carried on in Antwerp. 

There were attempts to force the market to create artificial tightness 
or ease (strettezza or largezza), as we have seen in the case of Gaspar 
Ducci and the syndicate he formed. This had its chief office in Antwerp; 
but his attempts to rig the market were chiefly at Lyons, and its devices 
were exercised first in one market and then in another, borrowing money 
in Antwerp to lend it out again in Lyons or vice versa. It was thus 
possible to reduce the risk of bill arbitrage, or even at moments to 
establish a virtual monopoly. 

These excrescences discredited the whole Antwerp bill business. The 
arithmetician Jan Impyn writes in 1543: 'As to bills, the common people 
here knows very little. People fall foul of the merchants and yet wot 
not what a bill is. Men hold the merchants for usurers and sharper than 
Jews, whereas they should be praised; for without bills there can in no 
more trade than sea-going without water. Yet of course bills, like all 
else in the world, can be mishandled.' 

The merchants defended the Bicorsa bill and arbitrage on the ground 
of the necessity of adjusting tightness and ease in the different markets, 
but strict canonists did not allow this. Even Guicciardini blamed these 
excrescences, though he defended bill business in general. 1 No attempt 

* Jan Ympyn Christoffds, Nieuwe instnietie ende lewys der looffdycker eonsten 
des rekenboecks, Antwerp, 1543; Guiooiardini, Descritt. d. Paesi Bonn, ed. of 
4681, p. 171. 


evet seems to have been made in Antwerp to fix official average rates 
for bills in Antwerp as was done in Lyons. This no doubt depended on 
the fact that in Antwerp the bill business was not as in Lyons concen- 
trated at the close of the fairs, but was distributed throughout the year, 
and the daily amount of the business was too large for such attempts. 
The Paris opinion of 1530 says, however: The price at which the mer- 
chants do business they call the bourse price (precio de la bolsa); for 
no one sets the price for himself, but only the Bourse association 
(commidad de la bolsa). 

It is interesting to note that the bourse is here called in its first be- 
ginnings an association, and is given the name by theorists who thought 
of other corporations as bourses. Actually, however, the Antwerp 
Bourse price was only the market price in the sense of the German com- 
mercial code, i.e. an actual price, not an average price fixed by any 
official body. These bill prices were communicated in the merchants' 
letters or in special leaflets, the origin of which is uncertain, but it was 
probably first in Antwerp. 

Antwerp Deposit Business. The bourse 'depositum,' a name which is 
a cloak for a loan, is not mentioned at Antwerp till comparatively late. 
Among theorists well versed in the Antwerp business, the author of the 
Paris opinion of 1530 makes no mention of the Deposito: Villalon, 
writing only thirteen years later, mentions it only as a bill from one fair 
to the next, as it had existed from quite early times; but Saravia 
Delia Calle, writing only a little later, mentions 'deposito' at interest 
and condemns it as a form of concealed loan. The usual form is 
first described by Guicciardini, who says: 'Here it is now called 
Deposito in order to cloak with a fine word the ugliness of the act - 
the loan of a sum of money for a certain time at a fixed price and 
interest, e.g. according to the permit granted by the Emperor Charles V, 
confirmed by his son King Philip, at an annual rate of 12 per cent. This 
rate was granted to merchants in bad times in order to avoid worse 
evil. . . . Such transactions would be actually useful, if people would 
be content with reasonable interest. This, however, is not the case, 
and the deposit business has assumed an arbitrary and unbearable 

What Guicciardini describes here is the undisguised loan, which has 
no similarity with the bank deposit we know. The so-called 'Deposito' 
in Antwerp was as old-established as the bourse business itself, but it 
had previously borne another name, and in the business community, 
e.g. in the correspondence between the South German merchants and 
their agents the new expression came into use very slowly. They spoke 
of 'money' or 'money at interest' which was worth 2 per cent, or 3 per 
cent, from one fair to another. The older designation 'finance' is used 


as equivalent to deposito, and if a distinction is to be drawn between the 
commercial and the fiscal loan Ditta di Borsa is spoken of. In 1549 the 
Imhofs write to their Antwerp agent: 'We hold the city of Antwerp 
will pay as much interest as Dita di Burcha. At the same price we like 
the city better.' 

The interest rate for the Deposito was the Antwerp market rate as 
determined by the frequent fluctuations of the money market. The 
'fixed time' which Guicciardini mentions was usually one fair, less often 
two, rarely three or four. A fair, as we know, was on the average a 
quarter. The time of the fair payments was, however, often altered, so 
that a fair often meant more or less than a quarter. 

In commercial loans on the bourse, the interest was usually 2 per 
cent, or 3 per cent, a fair, i.e. 8 per cent, to 12 per cent, per annum; some- 
times the interest was as low as If a fair (7 per cent, per annum). We 
do not hear that it ever rose above 3 per cent. Only when some in- 
dividual firm was in difficulties, it had to agree to far higher rates. 
Even the Fugger were so situated in 1563, when they borrowed 300,000 
crowns from Juan de Curiel deUa Torre. The nominal rate was only 10 
per cent., but since the Fugger had to take in payment Spanish State 
rentes at par, though they stood only at 50 per cent., the actual rate 
was a little under 30 per cent. The 300,000 fl. which the Schetz had to 
borrow in severe embarrassment from the Genoese in 1572 were just as 
dear. These loans, however, cannot be called regular bourse loans. 
There was unexampled tightness in 1562-3 and 1572, but we know that 
in 1563 the Fugger owed large sums to other people in Antwerp at 8 per 
cent, to 10 per cent. 

Conditions were quite different for the princes' loans and sometimes 
with those of the cities. These were not, properly speaking, deposit busi- 
ness, and are hardly ever so called. We will return to this point, but 
must first discuss the form of the acknowledgment of indebtedness in 
deposit business. 

In the correspondence of the South German business houses there is 
the most often mention of 'letters,' e.g. 'On good dittas and German let- 
ters^ per cent, is paid. Everybody at this time is looking for a Fugger 
letter.' The expressions dittas and letters are often used as equivalent. 
It is not stated whether the 'letters' were bonds or bilk (Schuld or 
Wechsel Briefe). Both forms were actually used in deposit business 
in Antwerp, the bond being a bearer bond, and the bill a bill with one 
signature. Of these the former, which was used also in credit dealing in 
commodities, was the commoner. These bonds could be sold and pledged 
without cession or giro, and if lost they could be paid off after public 
proclamation. An imperial order of 1537 declared them formally binding 
like bills. It was henceforward sufficient to make them valid that the 


drawer had put his signature 01 trade mark on them. Bearer bonds 
accordingly offered all the advantages of the bill exclusive of the greater 
facility for being turned into ready money, which the bill obtained 
towards the end of the sixteenth century through the giro at the 
Genoese bill fairs. 1 

General Sketch of Antwerp Finance Dealings. Originally all loans at 
interest were called 'finance' in Antwerp, but later this term was re- 
served for loans concluded with princes, provinces, or cities. In this 
sense, a distinction was drawn between 'finance,' i.e. fiscal money deal- 
ings and commercial transactions, bills, and deposito. The original 
meaning was retained, however, in the Netherlands finance accounts. 
There we find a standing heading entitled 'Deniers Frins (Pris) a 
Fraict et Finance,' the fact that interest was payable was expressly 
contrasted with 'Empruncts or Frests sans Fraict ne Finance.' 

The different kinds of loans concluded on the Antwerp Bourse were as 

(1) Bonds of the Court of the Netherlands, i.e. loans of the Netherlands 
Government, of which there were many varieties. They bore the per- 
sonal undertaking of the Emperor, or later the Spanish King, as ruler or 
his Governor, whether man or woman, and were charged upon certain 
definite revenues, or were under the guarantee of high state officials or 
individual cities, especially the city of Antwerp. 

(2) Private bonds of the highest officials or dignatories of the Nether- 
lands on the Government account. We shall come across cases when 
this was the Government's only means of raising money. 

(3) Bonds of the Provincial Diets of the Netherlands, especially the 
states of Brabant on account of the Government for taxes (aides) 
already granted to it, but not yet collected. 

(4) Bonds of the individual Netherlands cities, partly on their own 
account, but chiefly for lie Government. Those of the city of Antwerp 
were the most popular. Next those of the 'Seven Cities of Flanders' 
either together or separately, those of Antwerp, Malines, etc. 

(5) Bonds of the Netherlands Receivers General. We have already men- 
tioned these important papers. They were private bonds of the Rent- 
meister, i.e. General Tax Receivers of the different Netherlands pro- 
vinces on Government account. Originally they were only given to the 
creditors for greater security in addition to the Government bonds. 
Then the latter were omitted. As, however, the creditors were often dis- 
contented with the Receivers' bonds by themselves, they were given 
Court bonds in many different towns, which stated the special 
revenues from which the Receivers General were to pay the debt and 

Veraohter, Invent. No. 711; Place, v. Brabant, 1, 609, 511, 615, Register in 
Bulletin des Archives d'Anvers, vol. L 


promised not to apply these revenues in any other way. In many cases, 
however, the Eeceivers General were the principal debtors, and the 
ruler, in spite of his promises, did not feel bound to step in should they 
fail to pay. Hence the creditors obtained no payments for the enormous 
quantities of these bonds. Fine examples of them engrossed on parch- 
ment can still be found in the archives of the South German patrician 

(6) For completeness' sake, it must be added that large bourse firms 
often issued loans on account of the Netherlands Government, charging 
1 per cent, to 2 per cent, for their del credere. In this case it was not 
the bonds of the Government but of the issuing house that were dealt 
with on the bourse. Accordingly these did not constitute a public 
finance transaction. 

(7) Bonds of the English Crown, regularly under the guarantee of all 
Privy Councillors and the City of London, and on occasions under that 
of the Merchant Adventurers who had their staple in Antwerp. 

(8) Bonds of the King of Portugal, whose Antwerp agent was in most 
cases personally liable. 

In these bonds, the princes always promised repayment 'in verbo 
regio' 'de bonne foy, en parolle d'empereur et roy'; the cities engaged all 
their burghers with their property 'conjunctim sive insolidum'; interest 
was granted in form only as a special concession (in remunerate one 
laborum suorum ex nostra mera liberalitate et favore donavimus -) in 
order to avoid the laws against usury; and the interest was often 
reckoned in the capital of the debt. There is still much that might be 
said as to these formalities and they were certainly important in law. 
Their economic significance, however, was small, as the creditor was 
not secured by the more or less binding form of the bond, but by the 
certainty that the debtors could and would pay. 

Economically speaking, little importance attached to the bearer 
clause inserted in all Netherlands bonds and in no others, not even those 
of foreign princes. The latter on occasion were transferred as easily as 
the former. This was specially applicable to the Netherlands bonds of 
the Eeceivers and those of the King of Portugal. Even those provided 
with the Bearer clause seem like the rest to have required special trans- 
fer if assigned. As a rule neither the Netherlands Eeceivers General nor 
the city of Antwerp nor the other public debtors lent their bonds and 
seals for small amounts. Anyone who wished to invest small sums in 
bonds had to apply to a large bourse firm, who did .the business under 
their own name and made out to the person who paid them the money 
a declaration of trust (revers) which set out his share in the original 
bond and promised not to part with it before the part creditor was fully 
.satisfied. For example, the Fugger in 1556 formed great syndicates for 


taking over large lots of the Netherlands bonds of the Keceivers General. 
If, however, there was any question of dividing up the bonds in which 
many persons were interested, great difficulties arose. 

Many examples will show us how extremely complicated the business 
became through the system of numerous guarantees which mutually 
propped one another up. Most princes' loans bore interest higher than 
the market rate, so that merchants often borrowed money at 2-3 per 
cent, at one fair and lent it to a princely borrower at 4 per cent. In 
times of financial stress the difference was often 12 per cent, a year and 
more, but the risk was more than correspondingly increased. The city 
of Antwerp, on the other hand, did not usually pay much more than the 
market rate. When in 1557 the Kings of France and Spain ceased pay- 
ment the bonds of the city of Antwerp were still in good repute, and 
Antwerp could still borrow large sums at the same interest as the best 
bourse firms. At last, however, towards the end of 1561 people began to 
mistrust Antwerp, withdrew their money and lent it to the Diet of 
Brabant. Finally, however, even this was no longer solvent. 

Views as to the goodness of the different securities were very different 
at different times. Thus for a long time the bonds of the Beceivers 
General were regarded with distrust, while later even the largest 
amounts of these were easily disposed of. Finally they proved entirely 
worthless. Lazarus Tucher, who had a good judgment in such matters, 
still held in 1561 that the Portuguese loans were the best next to the 
English, although at that time no interest had been paid on them for 
years and they continued to pay nothing, while a composition was 
effected in the case of the French and Spanish Crown loans. The 
bonds of the English Crown, the only loans of this class which in fact 
proved safe, were often entirely discredited. Bourse opinions were just 
as misleading then as they are now. The bourse's reactions to political 
news also have altered very little in the last three hundred years. 

Financial Agents of the Netherlands Court and the Croum Agents in 
Antwerp. It happened on occasions that the financial counsellors of the 
Netherlands came in person to Antwerp to raise loans. This, however, 
was a symptom of financial difficulties and was therefore damaging. 
The Brussels Court for the most part used a broker or merchant as agent 
for its Antwerp loans, and the other governments had always to do the 

We have already learnt to know the financial agents of the Brussels 
Court as a body. This office was filled from 1516 to 1523, and on occa- 
sions until 1531 by Fieter van der Straten; he was followed from 1528 to 
1531 by Gerard Stercke and the well-known Lazarus Tucher (1529-41); 
then Gaspar Ducci (1542-50); finally, after 1552, Gaspar Schetz. In the 
intervals other merchants again held a similar position, Jorys Meuting, 

Thomas Muller, Jan Mois, and Gilles Sorbrucque. They served the 
Government as agents on behalf of others and as bankers on their own 
account. Besides this they occupied certain official posts and had the 
title of Imperial Counsellor. Their work as financial agents was not 
legally denned; it was not an office, but an occupation. It was, there- 
fore, distinct from that of the established agents. For a long time only 
the King of Portugal had an established agent in Antwerp. He sold 
pepper and other spices from the East Indies - a trade of which the 
King had a monopoly, and bought copper, munitions of war, ship- 
building materials, and other commodities. This gave rise to advances 
on an increasing scale and finally to pure loans. The first of the Portu- 
guese agents was Diego Fernandez, who is spoken of in Bruges about 
1490, but by 1494 had begun to stay at times in Antwerp. Others were: 
about 1500, Alonso Martini; 1503, Thomas (?) Lopez; about 1511, Albert 
(?) Lopez; 1514-21, Jean Brandon, who honoured and protected 
Albrecht Diirer when he stayed in Antwerp. His successor was Buy 
(Rodrigo) Fernandez (d'Almada) who held the position for some time, 
perhaps till 1543, the year when there is first mention of JoaoRabello, 
who was still acting in 1548. After 1556 we come across Francesco 
Pesoa, whom Guicciardini mentions in this position in 1667, by which 
time its importance had sunk considerably. When the correspondents 
of the South German firms speak of 'the agent' it is usually the King of 
Portugal's agent that they mean. 

The English Crown had from early times many connections with 
Antwerp, which was far the most important centre for English foreign 
trade. Henry VIII's political agents, Spinelli, Knight, Pace, etc., often 
stayed in Antwerp, where they had relations not only with the English 
merchants, but with those of other nations, collected news and negoti- 
ated on many occasions about money. For a long time, however, their 
dealings were not about loans, but large money payments to be con- 
veyed to the Emperor. The first agent proper of the English Crown was 
Stephan Vaughan, a merchant from London, a member of the Adven- 
turers Company, who stood in relations in 1557 with Cromwell, not yet 
a Minister. Later he was often employed by the Government to collect 
news in the Netherlands, to buy war materials and conduct negotiations 
about trade policy. 1 He did not borrow in Antwerp till 1545. His 
successor two years later was William Dansell, who did much the same 
work as Vaughan till 1551, not, however, to the satisfaction of the 
English Government, which recalled him in disgrace. Both Vaughan 
and Dansell were also Governors of the Adventurers in Antwerp. 2 

1 Brewer, Calendar, IV, 3053. Of. Burgon, Oresham, I, 57 ff. Sohanz, Engl. 
Handdspolitik, I, 77. 

' Burgon, I, 03-5. Turnbull, Calendar, Edw. VI, No. 33 & 


At the beginning of 1552 Dansell's place was taken by Thomas 
Giesham, also a London merchant and member of the Adventurers Com- 
pany, who, like his father, uncle, and brother, had often had dealings 
with the English Crown. His services, not only to the Crown from 1552 
onwards, but also to the whole of England, so far exceed those of other 
financial agents and established agents that we must give him a section 
to himself. First, however, we will say a few words as to the agents of 
the Governments of Spain and the Netherlands. One of these was 
Caspar Schetz, who after Ducci's fall was financial agent of the Brussels 
Court. In the year 1552, when Gresham took up the parallel appoint- 
ment for the English Crown, Schetz was entitled 'Facteur des finances de 
Pempereur,' which none of his predecessors had been. Three years later 
he was nominated by "King Philip II of Spain as his permanent agent in 
Antwerp. From the instructions then given Mm we see that he re- 
ceived a fixed annual salary, together with a commission on his business 
and allowances for any journeys. So far as we know none of the other 
royal factors had a position so closely analogous to that of an official. 
Yet Gaspar Schetz had large monetary transactions on his own account 
with the Government he represented as well as with other Governments. 
The King of Portugal's agent was even interested in the great pepper 
contracts which he concluded with merchants in Antwerp on account 
of his King. If we consider essentials rather than the form, Thomas 
Gresham was the agent who served his royal employer the best and the 
most faithfully. 

The last of the princely agents, Juan Lopez Gallo, was entrusted in 
1559 with the management of the Spanish finance business proper, 
while Gaspar Schetz kept those of the Netherlands. We have already 
seen that his actions were not above reproach. 

In 1567 Guicciardini, enumerating the agents resident in Antwerp 
in his time, called them all 'huomini qualificatissimi, 9 an understand- 
able description as he was close friends with some of them and 
had reasons to shield the others. He tells us that the Spanish and 
Portuguese agents since the bankruptcy of their Kings did no more 
business for them. There was subsequently no real change in this 

Sir Thomas Gresham. It is clear from what has been already said why 
this is the place to describe the work of this remarkable man. He did 
not belong to the financiers 'Geldleute,' with whom he did constant 
business in Antwerp, but was originally one large commodity merchant, 
a 'Merchant Adventurer,' who was employed by three rulers on account 
.of his outstanding qualities and the high position he enjoyed in the 
business world as Crown agent in Antwerp. In this capacity, that of 
'royal merchant,' as he was also called, he is one of the most important 


figures in the sixteenth century and the history of England. His im- 
portance, however, mainly took its rise from Antwerp. 1 

Gresham's first task was to raise loans in Antwerp for the English 
Government. The English merchants were not yet able to satisfy 
by themselves the Government's demand for credit, while the 
foreigners dealing in England had mostly, on the initiative of their 
native competitors, been slowly harried home to their own countries. 
In any case they would not have been able to provide the large sums 
which the English Crown had to borrow since the end of the reign of 
Henry VIII. This could only be done by means of the great Antwerp 
money market. In 1566 Gresham could boast that since he took up his 
post fourteen years before he had obtained 1,840,000 EL for the Eng- 
lish Crown and had repaid it nearly all. The loans were concluded in 
the usual way for one or two fairs and on maturity had to be either 
repaid or prolonged. Before Gresham's advent, extension had always 
been an expensive business, as his predecessors had as a usual thing 
bought jewels and commodities of all kinds at high prices from the 
creditors, thereby moving the real interest much higher than the 
nominal rate agreed on. Gresham soon abolished this practice. More 
important still, however, was the improvement he effected in the 
credit of the English Crown. Soon after the death of Edward VI, 
Gresham boasted that he had raised the credit of the King so greatly 
that he would have been able to borrow any sum he liked in Antwerp, 
'wherefore his enemies began to fear him, for hitherto his power had 
not been known.' 

Allowing for some exaggeration it is certain that under Gresham the 
credit of the English Crown was far better than that of the other princes 
who borrowed in Antwerp. This was specially true of the period since the 
accession of Elizabeth. Under Mary, Gresham had at first been removed, 
but was recalled when the Queen's credit had been damaged by the 
stupidity of another agent. During Mary's lifetime, however, Gresham 
was unable to carry out his own wise financial plans, so that the credit 
of the Crown underwent some temporary setbacks. He was able never- 
theless to establish it again, thanks to his unrivalled knowledge of 
the Antwerp Bourse and the large financiers, of whom many - including 
the Schetz-were his intimate friends. 

Gresham treated the financial dealings of the English Government as 
they should be treated - that is to say, as commercial business, with 
discretion, caution, and honesty. This was the secret of his success. 
From the first he insisted that all obligations must be punctually ful- 

Based on Burgon, Turnbull and Kervyn de Lettenhove, Acts of the Privy 
Council. Cf. also Ehrenberg, Hamburg und England im Zeitdtter der Konigin 
Elisabeth, p.60ff. 


filled. If necessary he pledged his own credit. He always kept himself 
exactly informed as to the state of the money market. He knew how to 
rivet the money and bill brokers to his interest; and as early as 1553 he 
wrote home, 'No bourse passes wherein I am not furnished with a state- 
ment of all monies borrowed on that day.' On Mary's death he hastened 
to Antwerp to assure the Queen's creditors that all her obligations 
would be promptly discharged according to her dying injunction to her 

Finally, when the outbreak of rebellion in the Netherlands had 
thrown the Antwerp money market into confusion, Gresham felt that 
the moment had come for making England independent of foreign 
countries, not only as to trade, but also in credit. On the 14th 
August, 1569, he wrote to Sir William Cecil: * 

' . . . I would wissh that the Q. Majestic in this time shuld not use 
any strangers but her own subiectes wherebie he and all other princes 
maie se what a prince ofpowr she ys. And bie this meanes there is no 
dowbt but that her highnes shall cause the Duke of Alva to know him 
self and to make what end with that low Countreys as Her Majestic will 
her self what brute soever is here spredde abrode to the contrary. Sir, 
seing I am entrid so farre with youe for the credit of the Q. majestic 
beyond the seas wherein I have travailed this 20 yeres and bie experi- 
ence in using oure owne merchanntes I found gret honnoi to the prince 
as also gret profit to the merchanntes and to the whole Bealm what- 
soever our merchanntes saye to the contrarye for when our prince 
ought owrown meane merchanntes 60 or 80 (thousands pounds) (Mti) 
then they knew them selves and were daily reddie and sure as good 
chere as stranngers did whiche Syr I would wissh again in this time of 
extremity to be usid for that I know our merchanntes be able to do 
yt. . . .' 

This was true, but at first Gresham had difficulties in obtaining large 
sums from the English merchants, and they often complained of the 
harsh treatment of them. Gradually, however, they came to appreciate 
such an opportunity for capital investments; and since Antwerp was no 
longer available, after a longish and uncomfortable period of transition 
the moment arrived when the English Government could satisfy their 
extraordinary credit requirements at home. Gresham introduced this 
great change and actively supported it; he was also one of the first to 
press for the abolition of the State ban on interest. Before this, however, 
he had done other, perhaps even more important, services. In the early 
days of his appointment he had managed by skilful manipulation to 
influence the rate for bills on London in favour of England and the 
Crown loans. Afterwards he directed all his energies to improving the 
'Brit. Mus. Lansd. MSS. 12, foL 16. 


English trade balance and the value of sterling. He achieved these ends 
chiefly by two acts which needed long and careful preparation, the 
destruction of the trade of the German Hansa towns with England 
and the coinage reform of 1560. In his reports to the English Govern- 
ment he laid down the principles which finally regulated the currency 
of the European States in the new epoch. He acquired his exact know- 
ledge of currency and bills through his business in Antwerp. We need 
not prove this here, and the fact by no means detracts from Gresham's 
merits. His merits consisted in the application of the principles 
and expert knowledge of the business world to the affairs of a great 

He remained all his life an exact and successful merchant, as well as 
a patriot and a true servant of his rulers - a rare phenomenon among 
the merchants and financiers of the sixteenth century, who seldom 
managed to combine both sets of qualities. 

Gresham owned a house in Antwerp in the Lange Nieuwstraat, but 
London was his home and the chief seat of his extensive business. He 
crossed the sea repeatedly on the Grown business, without in all cases 
getting a recompense in proportion to his trouble and deserts. His 
travelling allowances were only 20$. a day, and he often had trouble in 
getting the promises of compensation for his services fulfilled. Yet there 
is no doubt that his post as Eoyal Agent was a source of profit. He died 
one of the richest men of his day, after giving London an Exchange on 
the pattern of the one at Antwerp and founding a college called by his 
own name. He left his widow an annual income of 2,388, so large for 
the sixteenth century as to excite doubts as to its correctness. It 
must, however, be regarded as authentic. 1 

Gresham was also frequently employed on political missions in the 
Netherlands, and in the critical times of the Netherlands rebellion he 
provided England with materials for war, risking life and property in 
evading the prohibitive laws of the Netherlands. For many years he 
conducted the extensive news service of the English Government in the 
Netherlands, and it was in the first instance due to him that Queen 
Elizabeth and her statesmen were better informed as to everything that 
went on in Europe than any other Government. Gresham's remarkable 
double position comes out here, for the news which sent to his Govern- 
ment originated chiefly in the commercial world. He was thus able to 
exploit for his country on every side the advantages of the world 

Chronicle of the Antwerp Finances up to 1542. Up to 1510 or there- 
abouts the merchants who could lend capital in the Netherlands had 
their agencies in Bruges. In the year 1510 there first appear in the 
iBurgon, 11,490. 


;ilp ji | 


s ssd a'sd as 

10 10 10 o 10 ig ig ig ig 


Netherlands finance accounts payments to the Fugger on bills drawn in 
Augsburg and repayments of advances made by the Spaniard Antonio 
de Vaille, who, like the Fugger, was already settled in Antwerp. The 
loan business which then grew up in Antwerp had for long a very irregu- 
lar character. The loans were not concluded from fair to fair; other and 
usually larger terms were fixed by agreement - half a year or even more. 
Moreover, the loans were not yet very considerable. There were enor- 
mous fluctuations in the rate of interest. As yet there was no trace of a 
market rate as far as these loans were concerned. The latter gives 
further details for the years 1509 to 1512. 

On the 29th January, 1512, the city of Antwerp, at the most urgent 
request of the Queen Eegent and the financial connections, borrowed 
from certain unnamed German merchants 20,000 on the Government 
account to pay the German mercenaries. These merchants were to 
obtain repayment for themselves from the Aides of Brabant already 
granted. This loan cost 2,400 for five months and ten days = 27 per 
cent. The broker also received 100 . 

On the other hand, there were at this time loans which bore no 

In 1515, Prince Charles, afterwards Charles V, was declared of age, 
on the promise of 140,000 Fl. to his needy grandfather Maximilian. 
He then entered in state into Antwerp, already declared in this year by 
one of the English envoys to be 'one of the flowers of the world.' He 
prepared to make the journey to his Spanish kingdom. He was in 
great need of money both for this journey and the payment of the 
140,000 to the Emperor, and also because his grandfather on his 
mother's side, King Ferdinand of Aragon, had bequeathed Mm a great 
load of debt. Large sums accordingly had to be borrowed in Ant- 
werp, amounting in all to 166,000 . The greater part of this sum had 
to be prolonged on maturity in 1516. For this year we can state in 
tabular form the money borrowed in Antwerp by the Netherlands 

Besides the increase in the size of the loans we note that the fairs have 
begun to be used as terms. The sums borrowed in the second half of the 
year were meant for the war in Friesland, which made necessary even 
larger loans in the following year. 

At the beginning of 1517 the city of Antwerp, in order to meet the 
costs of the war, tried to sell annuities repayable within three years from 
the Aides of the province of Brabant. All efforts failed, however, to 
attract buyers on tolerable conditions. Accordingly in February, 1517, 
a sum of 45,000 was borrowed under the guarantee of the city of 
Antwerp from Antwerp merchants, the Government paying the cost. 
The interest amounted to 5,000 to the St. Remy fair, or 19 per cent. 





I|I^1J * 

g H s^-|- . ^ 

1 ' 1 

|3S||i||| I . -8 


s s 




O(o <eo 

g S S3 


per annum. Moreover, the loan of 27,000 from the Fugger which 
matured at the Whitsuntide fair was prolonged, together with interest 
then amounting to 3,000 , till Christmas, 1518, and a further sum of 
42,000 was borrowed from the Fugger at a cost of 7,000 in interest. 
We need not calculate the rate here. 

At the St. Remy fair in 1517 60,000 of the maturing debts could not 
be met. The city of Antwerp, high State officials and nobles had given 
their guarantee. In order, therefore, as is expressly stated in the finance 
accounts, 'to keep his word and protect the honour of the lords and 
gentlemen and their credit, and that of the city of Antwerp,' Kirig 
Charles ordered the prolongation of the remainder till the Easter fair, 
1518, at a cost of 10 per cent, for the half-year. The total amount paid 
in interest on such loans in the year 1517 was 34,441 at 40 gr. = 5,760 
L fl. In January, 1518, bands of discharged soldiers, eight or nine 
thousand strong, threatened to invade the Netherlands to plunder 
('pour piller et menger les subgects'). Cavalry of the standing army 
(compagnies des gens de guerre a cheval des ordonnances du roy) were 
summoned to drive away the unbidden guests. Since, however, these 
regular troops could not leave their garrisons without having their 
quarters paid for, it was necessary to give thetn six weeks' pay. Since, 
however, the State Treasury was empty on 15th February 11,000 L 
had to be borrowed in Antwerp till the following Easter fair at a cost of 
486 10s. 6p/., or about 18 per cent. 

On the 15th July in the same year the Court of Brussels, in order to 
give their months' pay to the garrisons of the province of Friesland, 
which was as yet unpacified, borrowed 38,000 in Antwerp from the 
Fugger, a debt for which a Receiver General of Revenue for the first 
time made himself personally liable. The loan cost only 4,000 for 
thirteen months, not quite 10 per cent., supposing the facts are correctly 
stated. At the autumn fair in the same year a sum of 41,000 was bor- 
rowed on Receivers General bonds till Easter, 1519. This operation 
cost 4,000 or about 20 per cent, inclusive of the brokerage to Pieter 
van der Straten, who also raised 107,600 at 15 per cent. The total 
spent in this year on interest was 22,602 at 40 gr. = 3,767 fl. 

Among the loans of the years 1519, 1520 and 1521 we note the follow- 

^ Per cent. 

13,000 L from 14.8.1519 to Christmas at *"* ^e 1 
24,000 L from Sep. 1519-Easter 1520 at 15 

26,000 L from May 1519-Easter 1520 at 7 

22,800 L from June 1520-Candlemas 1521 at 12 

28,000 L from June 1520-Candlemas 1521 at 10 

72,000 L from Aug. 1520-Christmas 1521 at 13 


32 636 I,}* 101 * ^ 152 - Easter 1521 at 
71,'539 L from Dec. 1520-Whit-Sunday 1521 at 
30,000 L from May 1521 to St. Remy 1521 at 
23,200 L from 1 .7.1521 to Candlemas 1522 at 
20,000 L from 1.10.1521 to 15.1.1522 at 

Hfrom Oct. 1521 to Easter 1522 at 16-18 

In addition considerable sums in brokerage were paid to Pieter v. d. 
Straten and to Bernhard Stecher, the Fugger's agent. There is as yet 
no question of a market rate of interest for these loans. 

The year 1522 is specially interesting for us. Early in the year money 
had to be raised at any price for the Emperor, who was in the greatest 
possible straits for money. In February 100,000 was raised in the 
following way. The Spaniards Francesco de Vaille and Francesco de 
Moxica, in association with certain other firms, lent this sum in Antwerp 
and were to receive in return 52,600 ducats in Spain. The loan was 
granted 'sans frais ne finance,' but the interest was included in the 
exchange rate for his ducats. There was some nervousness, however, 
lest the 52,500 ducats in Spain should not be paid. To meet this 
emergency on the request of the merchants, two nobles of high rank, 
Heinrich Graf von Nassau and Anton Lalaing, Graf von Hoochstraten, 
who was head of the Netherlands finances, pledged themselves per- 
sonally to pay the equivalent in Antwerp at the September fair in 1522. 
This operation cost 7,494 . 

For another claim De Vaille and Moxica were referred to Naples. 
Since, however, this bond was not honoured ways and means had to be 
found to meet it in Antwerp. 

In April a further sum of 64,000 was required in haste. Pieter v. d. 
Straten advanced this in bis own name, receiving in return four bonds 
of 16,000 apiece: the first issued by Jean Seigneur de Berghes, the 
second by Count Floris Egmont, the third by Adolf of Burgundy Seign- 
eur de Bevres, and the fourth from Philippe de Cray, Marquis d'Arschot., 
This sum of 64,000 was also to be repaid at the September fair. The 
real lenders were as we shall see the Herwart of Augsburg. Several 
other loans were raised. At the end of April, or the beginning of May, 
the Emperor needed at once another sum of 140,000 for his projected 
journey to England and for other purposes. He accordingly summoned 
the Conseil Priv6 and the Conseil des Finances in order to consider how 
to raise the money. There was no lack of proposals. The domains were 
to be pledged; or life annuities or perpetual annuities to be sold; the 


Aides could be anticipated on floating loans. Objections were advanced 
against all these financial expedients. Perpetual annuities were diffi- 
cult to redeem, life annuities very costly; floating loans from merchants 
still more so (these including brokerage cost 18 per cent., 20 per cent., 
or 22 per cent, per annum) . Pledged domains usually remained in the 
hands of the lenders; the cities which formerly had advanced money on 
Aides already granted were now overloaded with debts and their credit 
had gone. Finally, as time pressed, the Emperor sent the Counts of 
Nassau and Bergen twice in great haste to Antwerp, and through the 
agency of the Magistrate the followhig agreement was arranged. Cer- 
tain merchants declared their readiness to pay the Emperor at once 
70,000 in return for the three years' rent for the lease of the Customs of 
Antwerp and Zeeland, amounting to 117,000 (39,000 per annum). 
The city of Antwerp had to guarantee the payment of the 117,000 to 
the merchants, and were on the other hand released from their obliga- 
tion to pay to the Archbishop of Mainz and the Count Palatine 18,000 
fl. a year on the Emperor's account. The customs above mentioned had 
been pledged for this amount. This last act was obviously illegal, but 
then the whole transaction was highly extortionate. "When the im- 
perial envoy reported in Brussels, it was remarked at once that the 
merchants would get their capital back in less than two years. Never- 
theless the agreement had to be sanctioned. The merchants nominally 

paid in cash to the Emperor 117,000 

and received at once in interest 47,000 

and therefore they paid actually only 70,000 

For this they received 39,000 a year for three years, i.e. an interest 
of more than 30 per cent, per annum on 70,000. In fact, however, the 
transaction was not finished on these lines. The Genoese Toromaso 
Bombelli brought about another arrangement whereby the merchants 
received back their 70,000 , together with 15,666 interest for one 
year, 22 J per cent., still a very high rate. The Emperor wanted to give 
Bombelli 1,000 for his service, but he refused 'because he had not suc- 
ceeded in inducing the merchants to forgo the interest for the first year.' 
This unparalleled action shows how such extortionate transactions were 
regarded by respectable merchants. 

Since the transaction we have described brought in only 70,000 , 
instead of 140,000 , a further 72,000 had to be raised by other means. 
The Emperor accordingly in June owed the merchants at least 300,000 
to 400,000 at the time when he wished to travel direct from England 
to Spain in order to put down the last rebellions of the Comuneros. Then 


occurred one of those moments of acute financial embarrassment which 
we have already mentioned. There was no money to equip the ships 
which were to convey the Emperor, or to pay the soldiers who were to 
conduct him to Spain. Only Erasmus Schetz, after great efforts on the 
part of Count Hoochstraten, lent 10,000 on the security of a goblet of 
the Emperor and several gold chains belonging to the Countess. The 
other merchants excused themselves on the ground 'that there was no 
money on the bourse, that trade was at a standstill on account of the 
disorders,' and so forth. Finally, however, the Count succeeded in 
getting 20,000 till the autumn fair, paying 4,339 interest, or 52 per 
cent, per annum. 

At the autumn fair several large loans matured, including the 
100,000 of Francesco de Vaille and his associates. The Queen Regent 
was then in Antwerp, and since the creditors pressed for payment, a 
grand esclandre was feared. Means were at last found, but the new loans 
raised to pay off the old again cost on an average 21 per cent, per annum. 
On the different loans it varied between 13 per cent, and 27 per cent., 
without counting the brokerage to Pieter van der Straten. The interest 
paid in this year on floating loans was 82,000 . 

The financial situation, however, was at bottom a favourable one. 
All the same in the year following 18-24 per cent, interest had to be 
paid for the prolongation of the floating loans, and when an attempt 
was made to pay off the 64,000 due to the Herwart by selling annuities 
no one was found to buy them and the loan had to be prolonged. At 
the end of 1523 the floating debt amounted to about half a million. 1 
The greater part of this, however, was paid off by the end of the year 
following, and in 1526 it was entirely disposed of. The Government had 
completely got the better of the merchants, as we see from the following 
story. The amount due to the Herwart, 64,000 , was to be repaid in 
October, 1524. Actually the repayment took place in instalments in 
the course of the following year. The Herwart naturally demanded 
interest for this delay, only 12 per cent., however. This request was 
not granted, and after long negotiations they had to be content with 
9 per cent. 

The course of a few years witnessed enormous fluctuations in the 
general level of interest. 

The whole organization of business in Antwerp was still very imper- 
fect in 1526, as we see from the following statement by an agent of the 

'I will endeavour to learn when the four markets here and in Bergen 
begin. I have asked many men and no where have had a sure answer. 
Men say they begin at various times. The last Famas market begins 
la Archives, Chambre des Comptes, No. 120, foL 202 ft. 


after Our Lady's Birthday in August and the payment for the same on 
the 23rd October.' 

Antwerp at this time was not yet a money market of great inter- 
national importance. We possess an English memorandum, drawn up in 
1564, which deals with this point as follows: 'What nations or merchants 
were wont formerly to lend out money in order to serve the princes and 
states in their wars and other necessities? The German merchants were 
the greatest and some Italians. Who now lends the most money? The 
merchants of Antwerp and other merchants in the Low Countries. It is 
not much more than thirty years since in Antwerp there were not above 
two or three merchants who lent money at interest, and these from their 
own resources could advance barely 20,000 fl. or 80,000 thaler. 
Now, on the other hand, there are thirty or forty great merchants who 
could lend 300,000 without hurt to their other business.' 

This testimony is to be received with caution. The English memor- 
andum wished to magnify the rise of Antwerp, which it attributed to 
English trade. It is moreover not clear whether the designation 'mer- 
chants of Antwerp' covers those whose chief business was there or those 
who had a factory there. In the first case the Fugger, Welser, Herwart, 
de Vaille, Gualterotti, etc., were not to be regarded as Antwerp mer- 
chants; in the other it would be wrong to say that in 1530 in Antwerp 
only two or three merchants could lend large sums of money. The real 
state of affairs was that the Netherlands Government could then on 
occasion borrow considerable sums from the foreign merchants trading 
in Antwerp. The largest sum, however, in the period treated hitherto 
did not exceed 500,000 Art. at 40 gr., or 357,000 fl. Eh. There was no 
change either in the next few years. On the other hand, in 1527 the 
Fugger alone had claims on the Hapsburg brothers amounting to three 
times this amount, and only a small part of this originated in Antwerp. 
Only the King of Portugal, besides the Netherlands Government, owed 
the Antwerp merchants large sums. These, however, were not pure 
financial transactions, but advances on pepper sales, purchases of 
copper or credit, etc. That Antwerp in the first quarter of the sixteenth 
century was not an important money market is shown above all by the 
high rate and violent fluctuations of the interest which the Netherlands 
Government had to pay in that market. These were almost the same as 
those which, except in certain isolated cases, the Fugger, Welser and 
other South German houses charged their royal creditors on the 
Augsburg loans. 

In 1526 and 1527 there was nothing doing in the Antwerp money 
market; but in the following years business began to revive. In 1528 
there was only one important transaction, the loan of 200,000 from 
the Hochstetter. In this case the Government had to take in payment 


quicksilver and cinnamon, commodities which were then purchased by 
Lazarus Tucher at a loss to the Government of 74,000 . The financial 
officials regarded this as a very huge loss, but since no other interest was 
paid and the loss distributed over five years, it was tantamount to 
interest at 18 per cent., and in reality things might have been worse. 
The usual rates of interest in 1528, 1529 and 1530 fluctuated between 
14 per cent, and 22 per cent., the upper limit being nearer the average. 
The largest transaction in these years was a loan of 218,812 con- 
cluded in November, 1529, for seven months at the rate of 20 per cent, 
per annum in order to meet bilk drawn by the Fornari and other 
Genoese merchants on the Netherlands finance administration. Next 
most important was a loan of 125,000 contracted in August, 1529, to 
meet the bills of the Fugger, Welser, and Herwart. This cost 21J per 
cent, per annum, in spite of the personal guarantee of the highest finance 
officials; also, after a quarter, 74,000 of it had to be prolonged, which 
cost a further 17| per cent. This, however, was a small matter com- 
pared with the enormous loans which the Fugger at this time granted 
to the Emperor and his brother. 

The following examples will show the extreme complexity of the 
transactions of the Netherlands Government at this time. In 1527 the 
Emperor had to make a payment of 45,000 to the Bishop of 
Utrecht. A bond of the Hochstetter for 30,000 payable in 1529 was 
given in payment. The Hochstetter, who did not pay over any ready 
money, were given a guarantee by the city of Antwerp, which in turn 
received a guarantee from Count Hoochstraten, the chief of the Nether- 
lands finances. He promised the Bishop of Utrecht, should the Hoch- 
stetter fail to pay, to do so himself, and received in his turn under- 
takings from the Emperor that he would be compensated for any pay- 
ments he might have to make under his guarantees. The Hochstetter, 
as we know, got into difficulties and transferred the guarantee of the 
city of Antwerp to Diego Mendez in Antwerp. They became bankrupt 
shortly afterwards, and the Bishop of Utrecht applied in the first in- 
stance to Count Hoochstraten, while at the same time Diego Mendez 
applied to the city of Antwerp, which in turn had recourse on the un- 
fortunate Count, now in danger of having to pay twice over. He accord- 
ingly seized the remainder of the Hochstetter's claim still due on the 
loan of 200,000 L. This claim, however, which amounted to 170,000 , 
had been handed over by the Hochstetter on the eve of their bank- 
ruptcy to the Fugger. This gave rise to new lawsuits; finally, however, 
Wolff Haller undertook to redeem for 6,000 one of the Count Hoch- 
straten's bonds, while the other had already been met. 

The following statement shows the sums shown in the Netherlands 
finance accounts under the heading 'Deniers pris & frais et finance' dur- 

ing the years 1521 to 1530. They contain chiefly interest and brokerage 
for the floating loans, their losses on bill transactions and instalments of 
repayments. They therefore give a fair picture of the Netherlands 
finances at this period. The livres are at 40 gr. Flemish. 

1526 1,092 

1522 112,195 1527 1,623 

1523 18,569 1528 93,688 

1524 5,679,, 1529 92,151,, 

1525 10,864,, 1530 57,079,, 

This makes a total of 455,000 L for ten years or an average of 
45,500 L. a year. During this period the total revenues of the Nether- 
lands Government averaged 1,440,000 L a year and the Aides (the 
direct taxes granted by the Diets) alone averaged a million L at 40 gr. 
From this must be subtracted, however, the considerable grants of 
reductions and remissions of taxation amounting on an average to 
250,000 L a year. Taking this into account the Netherlands Govern- 
ment rejoiced in an average yearly income of 1,200,000 L, against which 
the 45,500 L for the floating debt charge was a mere trifle. The financial 
situation of the Netherlands was extraordinarily favourable, and yet 
it could not always borrow even at 20 per cent, and over. 1 

Further, in the year 1531, the Emperor undertook enormous repay- 
ments of his old and new debts in the Netherlands from the extra- 
ordinary receipts under the Peace of Cambrai and from the Aides of the 
same year; the city of Antwerp alone received nearly half a million L 
Art. at 40 gr. On the other hand, during the same year he had to take up 
large floating loans at 12 per cent, to 21 per cent, interest; and Stephen 
Vaughan, who for some time had done all sorts of business for the English 
Government in Antwerp, was never tired of reporting how short of money 
the Emperor was. 8 He borrowed largely in Augsburg at this time, as we 
have seen, promising repayment in Antwerp, losing 18,375 L or 215,250 
L, owing to the adverse exchange. Even his contemporaries wondered 
why, in spite of the increasing stream of gold and silver from America 
flowing into his treasury, the Emperor always had recourse to short- 
term loans at high rates. 8 

The following decade saw little change in these conditions; but there 
is an unmistakable, though slow, reduction in the rate of interest. In 
1535 and 1536 it fluctuated between 13 per cent, and 20 per cent. Most 

1 In Brussels Archives (Papiers d'Etat et del' Audience, No. 873): Revenues et 
depenses d. Charles V, 1520-30. 

Gairdner, Calendar, V, No. 246; State Papers, Henry VIII, vol. VII, 301. 
'Brewer, Calendar, VII, No, 440 (1534). 


large loans, However, only cost 13 per cent, to 15 per cent., though the 

demand for money was increasing and the market was tight. 1 

In February, 1535, when there was fear of a French invasion, a sum 
of 250,000 L, partly for six months and partly for a year, was borrowed 
from Lazarus Tucher at 14 per cent, under the guarantee of the Queen 
Regent, the Knights of the Golden Fleece, and high officials. The loan 
was not met on maturity - (it was not in fact paid till 1542) - and the 
rate of interest rose accordingly to 18 per cent, to 20 per cent., but not 
beyond this; it then gradually sank, and in 1539 fluctuated between 10 
per cent, and 13 per cent., and in 1541, the demand for money having 
increased, between 12 per cent, and 16 per cent. In the last-mentioned 
year the rate of interest is usually stated in the finance accounts, while 
hitherto only the amount paid had been entered. At this time 3 per 
cent, to 4 per cent, was usually paid from one fair time to the next on 
the Court loans. Lazarus Tucher, Dismes de Ferrere, and Gilles de 
Sorbrucque lent money on these terms, the largest amount being 
197,000 L. The total interest paid in 1541 was 96,516 L, not higher than 
in many of the preceding years. It was only in 1542 that this limit was 
considerably exceeded. 

The Period from 1542 to 1551. There is no better illustration of the 
financial situation of the Netherlands Government at this period than 
the following figures from the Comptes de la Recette Generate. 

Receipts. Expenditure. 

1540 1,040,795 f 928,855 

1541 1,051,017 976,075 

1542 3,986,294,, 2,631,200,, 

1543 3,376,437 3,674,531 

While, therefore, the years 1540 and 1541 together showed a surplus 
of almost 200,000 L, the two years following had a deficit of nearly a 
million, in spite of the inclusion in the receipts of large loans and other 
extraordinary receipts. This change for the worse is due entirely to the 
war with France, which cost in the Netherlands alone 1 \ million pounds 
(at 40 gr.) and in 1543 2 million. As a result the Brussels Court's financial 
transactions in Antwerp greatly increased in scope under the skilful 
management of Gaspar Ducci, while the rate of interest at first fell be- 
cause the supply of capital exceeded the demand. 

period in the history of Antwerp. The danger of war had caused the 
building of new fortifications, and the city had at the same time been 
extended and had become such a well-secured place that 'many men 

i Lanz, Carresfondenx Carls V, t. 668, 665. For 1537, ibid. U, 673, 677. 


from the country and other districts streamed in to dwell there.' l 
Guicciardini seems perhaps to exaggerate the importance of this cause of 
Antwerp's development. 

In 1542 an arrangement was made as to several large advances of 
Lazarus Tucher, who did not come off particularly well under it. In 
1535 and 1536 he had lent 368,825 L, and for six years no interest had 
been paid, nor had the promised repayments been carried out. He now 
received his capital and only 52,731 L for interest over the whole period, 
equivalent to not more than 2 J per cent, per annum. For small advances 
in 1538 and 1539 he obtained as much as 13 per cent, to 16 per cent. 

The first loans for which Caspar Ducci acted as agent were concluded 
at Candlemas, 1542, at 11 per cent, to 12 per cent., in order to repay 
the maturing bonds of the Receivers General at 12 per cent. He re- 
ceived in return as security new bonds of the same kind, which he resold 
to merchants and other holders of capital. At the subsequent fairs he 
raised in the same way still larger sums for the war expenses. In the 
course of the year he borrowed about a million pounds (at 40 gr.), 
almost all at 12 per cent, per annum. 

In August, 1542, when a French invasion was feared, a subscription 
was opened on the Antwerp Bourse for a voluntary loan without in- 
terest, which yielded the sum of 209,800 . This was repaid next year 
by the sale of annuities and in other ways, and another voluntary loan 
was made, 200,000 being contributed by the city of Antwerp and 
104,000 by private individuals. This, however, was not a financial 
transaction, but a contribution from patriotic or other motives to the 
defence of the country. 

In 1543 Gaspar Ducci raised 1,200,000 L, Lazarus Tucher 200,000 L, 
and Eustace Kaltenhofer 120,000 L, of which a part remained unsettled 
for not quite the whole year. As the interest paid amounted to 102,200 
L at 12 per cent., the amount of the debt throughout the year averaged 
850,000 L, an hitherto unprecedented burden of floating debt. 

The city of Antwerp also raised in this year extraordinarily large 
amounts for the building of the new fortifications and the enlargement 
of the bounds of the city. 2 

In the year 1544 the loans continued; the supply of money was shorter 
and the rate higher. We can see this process best in the business letters 
of Hieronymus Seller. As late as the Pamas fair in 1543 12 per cent, 
was paid on the prolonged bonds of the Receivers General; but by the 
end of January, 1544, the rate had risen to 14 per cent. At the beginning 
of February, the letters say, 'I am glad that thou thinkest the Bonds of 

1 Descritt. d. Paesi Bassi, ed. 1581, p. 127. 

' Deseritt. d. Paesi Bassi, ed. 1581, pp. 95, 127. StadtepratokcOen, ed. Pauwels, 


the Receivers General will bring a good deal of ready money on the 
Bourse this quarter day.' 

The rate asked now began to be 8 per cent, till the Whitsun fair, i.e. 
for six months. 'Should peace come there would be money enough at 5 
per cent, (the half year).' The scarcity of money was partly due to 
the fact that the Receivers General had paid no interest for several 

In May and June the rate for the Court loans was usually 16 per cent., 
and this continued in the months following. We have a certificate of the 
Netherlands finance administration for the 26th August, 1544, which 
states that on the sums borrowed for the Emperor in Antwerp the rates 
are ordinary interest (frait ordinaire) 12 per cent, per annum, extra- 
ordinary (par forme de gratuyte) a further 1 per cent, per fair, a total 
accordingly of 16 per cent, per annum. The reason for this increase of 
the rates is stated to be the extraordinarily large sums raised, not only 
for the Emperor, but for the King of England. Nicolas Nicolai, the 
Receiver General of Brabant, at the Whitsun quarter day had been 
unable to meet the obligation of 360,000 L he had assumed, from the 
Aide of 400,000 L which the Diet had already granted. The Diet 
had to issue its own bonds for capital and interest. Finding the in- 
terest too high however, the Finance Administration issued this 
Certificate and the Diet accordingly granted interest at 16 per cent, 
and repayment at the Christmas market, 1545. 1 

We are never told the amount of the loans borrowed in Antwerp for 
King Henry VIII by his agent Stephen Vaughan; but we know that in 
1545 the King owed the Fugger in Antwerp 152,180 pounds Flemish, or 
913,080 L of 40 gr. on a single transaction. The Netherlands Govern- 
ment had never dealt on this scale in Antwerp. 2 

The Antwerp debt of the King of Portugal at the end of 1543 is esti- 
mated by his agent Joao Rabello at two million Cruzadi or Portuguese 
ducats, an incredible amount even allowing for the fact that a great 
part of this was merely payments in advance for pepper contracts. The 
chronicler adds that the agents had reckoned such a high rate of 
interest that the King's debt doubled in four years. This is quite prob- 
able, for the agent had himself paid 12 per cent, to 16 per cent, per 
annum, or rather 3 per cent, to 4 per cent, per fair. If he charged the 
King 4 per cent. = 18 per cent, this would double the capital in four 
years at compound interest. 3 

The Haug of Augsburg had the following claims outstanding in 
Antwerp in 1545: 

1 Brussels, Chambres de Camptes, No. 110. 

Bymer, Foedera, ed. 1704, XV, 101. 

Sousa, Anwtee deetreiDont Joao III, ed. Hwmlano, p. 408 ft. 


8,648.4.2 L City of Antwerp. 
3,150 L King of Portugal. 
13,929 .6 .3 L Bonds of the Receivers General. 
12,600 L Gaspar Ducci, interest in Fugger loan. 
1,646. 5 L Various. 

This amounts to a total of 39,973.15.5 L FL, or in round numbers 
240,000 L of 40 gr. 

The Fugger had the following claims outstanding in Antwerp in 1546: 
21,746 . 13 L City of Antwerp. 
30,739. 11. 8 L Brussels Court. 
6,000 L King of Portugal. 

83,900 L King of England. 

44,000 L Gaspar Ducci, interest on bonds of Receivers General. 

These sums amount to 186,386.4.8 L Fl., or in round figures 
1,118,000 L of 40 gr. This gives some idea of the sums which the South 
German merchants taken by themselves invested in Antwerp. Some of 
this money of course was borrowed in Antwerp. For instance, the 
Fugger borrowed as follows: 

14,570 . 12 . 6 L from Pamas fair, 1546, to Christmas fair, 1547, at 2J per 
cent. (=9 per cent, per annum), from Sebastian 
12,600 L from Pamas fair till Easter fair, at 5 per cent. ( = 10 per 

cent, per annum), from Barth. Welser & Co. 
4,090 L from Pamas till Christmas fair, at 2J per cent. ( = 9 per 

cent, per annum), from Anton Haug and kinsmen. 
6,544 L from Pamas till Christmas fair, at 2J per cent., from 

Ludwig Ligsalz. 
6,201 L for two fairs, at 4 J per cent. ( = 9 per cent, per annum), 

from Count van Dale. 
8,170 L for one fair at 2 J per cent. ( = 8J per cent, per annum), 

from Geronimo Diodati. 

2,385 L for one fair, at 2 per cent., from Erasmus Schetz. 

And so forth, m a ldng a total for 35 entries of 110,234 L Fl. or 
661,404 L at 40 gr. 

This money cost the Fugger on an average 8 per cent, to 10 per cent, 
per annum, while on their side they received 12 per cent, on the bonds 
of the Receivers General, 13 per cent, on the debt of the English King, 
13 per cent, on that of the Brussels Court, and 11 per cent, on that of 
the King of Portugal. 

It appears that the Fugger regarded the interest paid by the King of 
England as high, for they asked their agent not to tell Ducci how high 
it was. The bonds of the Receivers General fell into discredit at the 


Pamas fair, partly because no interest was paid and partly on account 
of the onset of the war of Schmalkalden. No one would have them and 
money generally was easy. Even now, however, the Government bor- 
rowed through Ducci large amounts at 11 per cent, to 13 per cent. 

The next few years up to and including 1551 saw little change in these 
conditions. The princes continued to borrow largely, but on the whole 
the interest showed a downward tendency. In 1549, however, William 
Dansell, the English Crown agent, borrowed at 13 per cent., and said 
he could raise another 100,000 L Fl. at 14 per cent. 1 He said emphatic- 
ally that this was not excessive as the Emperor paid 15 per cent, to 18 
per cent. This, however, was incorrect, for we see from the Netherlands 
Finance Accounts that the Government only paid 10 per cent., and even 
9 per cent, on small amounts which were offered to it. 

This is confirmed by the interesting instructions given in June, 1549, 
by the Imhofs in Nuremberg to their Antwerp agent. All this shows 
how intensely at this period the South German business houses wished 
to invest their capital in financial transactions, and that they were 
quite content with 10 per cent, per annum. 

Dansell was a clumsy agent, and the interest he paid for what he 
borrowed on the Crown account in Antwerp was therefore unduly high. 
The Privy Council knew better and recommended him not to pay more 
than 12 per cent. Lazarus Tucher in fact declared his readiness to lend 
22,500 L FL at this rate, but the agent was to take payment in kind, a 
losing game. On loans in money he was asked to pay 13 per cent, as 
before, and he offered 12 J per cent, without success. The unfavourable 
treatment accorded to the English Crown by the Antwerp financiers 
had become such a settled habit that Gresham had the greatest 
trouble in getting better conditions by his skilful management of 
the market. 8 

The higher interest paid at this time by the French and English Kings 
naturally made it harder for the Emperor to get the money he required. 
The Government accordingly tried to carry out in all stringency the 
long-standing prohibition on the export of specie, e.g. Lazarus Tucher, 
who was the most intimately acquainted with the Brussels Court, re- 
fused decidedly to help the English agent to export ready money. 
Dansell succeeded, however, in secretly sending away large sums at his 
own risk. The merchants' preference for paying him in kind was, how- 
ever, stimulated by the prohibition. Gaspar Ducci, less scrupulous than 
Lazarus Tucher, carried on exchange dealings with Lyons, whereby he 
managed to create artificial tightness of the market, sometimes in Lyons 

1 Tnmbnll, Calendar, Edward VI, No. 137. 

Turnbull, Lo. NOB. 139, 142, 146, 148, 160, 153, 166, 161, 162, 164, 172, 184, 
193, 198-9, 207. 


and sometimes in Antwerp, in order to get more for his money in either 
market. This arrangement, however, came to grief in the end. 

The development of the Antwerp money market after 1522 unques- 
tionably owes much to Ducci, who succeeded by his sly and daring 
financial expedients in attracting money from all sides. To a far greater 
degree than Lazarus Tucher he is the first representative of a class of 
financier which has become increasing familiar. 

Already at this time in the Antwerp money market small syndicates 
had begvin to be formed. We know already the Ducci-Seiler-Neidhart- 
Grimel-Pecori syndicate. This, however, was, properly speaking, a com- 
mercial undertaking: what we mean here is something different. The 
Fugger had for a long time past granted other business houses an in- 
terest in their financial undertakings. This system was further developed 
in the period 154SS-51. The Fugger granted the Haug an interest, 
and the Haug did the same to yet other merchants, e.g. in 1549 the 
Haug had outstanding in Antwerp: 

4,503 L lent to the Eeceiver General, Jan van Koden. Wolff 

Poschinger was interested in this and also in: 
2,500 L claim against the Eeceiver General Jan Partnol. 
20,400 L lent to the city of Antwerp. 
14,489 L lent to the Queen Eegent. 

The Ligsalz were interested in both these last loans. 

As the Imhof then wished to invest money, their Antwerp agent 
applied to Ducci, Poschinger, Kaltenhofer, the Welser, etc. 

Perhaps it would be more accurate not to speak of syndicates in all 
these cases. A syndicate was frequently formed, but still more fre- 
quently the interest only came about because there were no divided 
bonds in round numbers, so that in a financial operation in which several 
persons were interested only the largest holder held the bond and then 
issued declarations of trust to the rest. Generally speaking, there were 
seldom such large syndicates in Antwerp as in Lyons; for there all 
financial dealings were concentrated on the loans of the French Crown, 
while in Antwerp the business was distributed among many different 
kinds of loans. 

Though at this period the merchants and other capitalists began to 
crowd into the finance business, yet so far not to an excessive or un- 
healthy extent. Foresight and caution still prevailed in many quarters, 
and many groups still remained without the dangerous inclination to 
participate in finance, while certain of the greatest business houses, 
notably the Fugger, had the intention of withdrawing from this business. 
Many firms of the second rank, however, had of late made much money 
with little trouble in financial dealings, and these took good care that 


this inclination reached an ever widening circle, as soon as new calls of 
an extraordinary sort were made in the money market. 

The Period from 1551 to 1557. The state of the Netherlands finances 
was again quite satisfactory by 1551. There was no extraordinary ex- 
penditure and the floating debts were either repaid or shortly to be so. 
The budget showed a surplus of 173,500 L (at 40 gr.), available for 
fortifications, arrears of soldiers' pay, etc. The outbreak of the war with 
France and the rebellion of the Elector Maurice of Saxony altered all 

In the Pamas fair of 1551, the quarter day of which fell in November, 
445,900 L of the bonds of the Eeceivers General fell due for payment. 
The sums destined for this purpose had, however, to be used for the war, 
and another 554,000 L had to be borrowed, so that Caspar Schetz, who 
was now financial agent of the Brussels Court, had to borrow in all a 
million pounds (at 40 gr.) or Carolus gulden. He resold bonds of the 
Eeceivers General at 12 per cent, and so was able to satisfy the most 
pressing needs. Money was, however, so tight during the fair that 
Alexius Grimel, who had also promised the Government 300,000 L, was 
unable to keep his word. With great trouble he got together 246,228 L, 
obtaining 128,000 L from the Afiaitadi, 70,000 L from Martin Lopez, 
30,000 L from Christopher Welser, etc. Grimel had to give the Govern- 
ment bonds on these firms, since ready money was unobtainable. The 
rate, however, did not rise above 12 per cent, per annum. 

At the Easter fair, 1552, a loan of 255,000 Carolus gulden at 
12 per cent, was borrowed from the Fugger through Gaspar Schetz. 
On the other hand, Thomas Gresham, the newly appointed agent of the 
English Crown, in February, 1552, had to pay Lazarus Tucher 14 per 
cent, on a loan of 14,000 L Fl. ( = 84,000 Carolus gulden). He must have 
borrowed other money in addition, for in April he repaid the Fugger 
77,500 L Fl. (=465,000 Carolus gulden), and in the whole period 
from 1st March to 27th July 106,300 L (= 637,800 Carolus gulden), 
none of which he brought with him from England. A debt of 44,000 L 
owing to the Fugger and one of 12,000 L to the Schetz, a total of 
66,000 L FL (= 336,000 Carolus gulden), had to be prolonged at 14 
per cent, till the pay day of the Whitsun fair in August. 1 

Meanwhile the Netherlands Government was also forced to pay 
higher rates; but even at 13 per cent, and 14 per cent, it could only raise 
small amounts in May. At the beginning of April the Queen Regent 
had entreated the Emperor to send from Spain some of the rich supply 
of American silver which had just arrived there. The permission was 
given, but the Government had no money to equip the fleet which was 
to fetch the silver. The city of Antwerp now came forward. It bor- 


rowed the necessary sums, mostly at 13 per cent, ot 14 per cent., from 
the merchants, who themselves wished to import large sums by means of 
the fleet, and were therefore some of them disposed to assist at low 
interest. One of them, Joos van den Steene, even advanced 50,000 
Carolus gulden without interest. The arrival of the fleet was delayed, 
however, and in the autumn market little money was to be had for 14 
per cent. 1 The Netherlands Government accordingly, in 1552, only paid 
in interest 141,300 Carolus gulden and this mostly on loans contracted 
outside Antwerp, chiefly by the Emperor in South Germany. This was 
less than had been paid in 1542. In this year the Government had the 
extraordinary demand for money chiefly by selling annuities. In 1551 
about 23,000 Carolus gulden worth of annuities on the provinces of 
Flanders, Brabant, Holland, etc., at 4-6 per cent, were sold and a capital 
of about 310,000 fl. was raised. 
In 1552, on the other hand, the sales were : 

for war expenditure 94,600 fl. annuities at 8 per cent, to 10 per cent, 
for repayment of float- 
ing debt 79,000 fl. 6 per cent. 

amounting to a total 173,600 fl. 

a yield in capital of 2 million Carolus gulden. 2 These sales of annuities, 
however, had nothing to do with the financial transactions of the 
Government on the Antwerp Bourse, as is testified by the difference in 
the rates. In the sale of annuities, the personal credit of the Emperor, 
the Queen Eegent and the Netherlands Receivers General did not come 
in, while it was the decisive factor in the Antwerp dealings. This per- 
sonal credit was then at a low ebb, a circumstance largely attributable 
to the Emperor's ill-starred policy and also the ruinous system of 
financial management introduced by Erasso. 

The Antwerp money market could easily have let the Government 
have the money, as it proved by its treatment of the English Crown, 
whose new agent had contrived by his skilful and honest management 
greatly to improve his King's credit. s Gresham had endeavoured at the 
Whitsun fair to induce the Fugger and the Schetz to consent to a further 
prolongation of their claims, which amounted to 56,000 L Fl. He was 
unsuccessful in this and went home to report to the Government. He 
was ordered to resume his efforts and in particular to tell the Fugger that 
the King would gladly have paid his debt on maturity, 'but in this 
troublesome time of the world, it behoved his Majesty to so consider 

* Brussels, Chambres des Comptes, No. 23469 and 23470. 

Brussels, Chambres des Comptes, No. 434. 


his estates that for divers great and weighty considerations, his Majesty 
otherwise is moved to employ the same money which was prepared for 
their payment. And therefore his Majesty doubted not that the said 
Fulkers will be content to think this consideration reasonable and not 
forget the benefits and good bargains that they had had of the King's 
Majesty, with good and true payments at all times made, and assure 
themselves that were it not for weighty causes, his Majesty would not at 
this time defer any such payment. Wherein his Majesty the rather 
hopeth of this contentation, for that Antonio Fulker himself, beingherein 
conferred with by his Majesty's Ambassador with the Emperor, seemed 
ready to gratify his Majesty, not only in this matter, but also a greater.' 

Gresham was but little edified by this commission. On his return to 
Antwerp on the 20th August, the day when the claims of the Fugger 
and the Schetz should have been met, he wrote to the Duke of North- 
umberland, who then had the greatest influence on the King's Council: 
'For that yt shall be no small grief unto me, that in my tyme, being his 
Majesty's agent, anny merchant strangers shulld be forssid to forbear 
their monny against their willes; wyche matter from hensforthe must be 
otherwayse foreseen, or else in the end the disonnestye of this matter 
shall hereafter be wholly layde upon my necke, yff any thinge shuld 
chance of your Grace, or my Lord of Fendbrocke, otherwise than well; 
for we be all mortal. To be playne with your Grace in this matter 
according to my bowndyd dewtye, veryly if there be not some other 
ways takynne for the payment of his Majesty's detts, but to force men 
from tyme to tyme to prolong yt, I say to you the end thereof shall 
neyther be honnorable nor profitable to his Highness. In consideracyone 
whereof, if there be none other ways takynne forthwith, this ys to most 
humbly beseche your Grace that I may be dischargyd of this offyce of 
Agentshipe. For otherwise I see in the end I shall reserve shame and 
discredit thereby, to my utter undoing forever: wyche ys the smallest 
matter of all, so that the King's Majesty's honour and creditt be not 
spotted therebye, and specially in a strange country; whereas at this 
present his credit is better than the Emperor's. For now the Emperor 
geveth rvi per cent., and yet no monny to be gotten.' 

Gresham had raised some of the money with which he had paid some 
of the King's debts in his own name and credit, for otherwise he could 
not have obtained it. He had, moreover, begun to break the habit intro- 
duced by his predecessors of taking in payment at each prolongation of 
the debt jewels or other goods at exaggerated prices. He now proposed 
a new method of raising the King's credit and paying the royal debts. 

He proposed that the Government should put at his disposal in Lon- 
don the sum of 1,200 a week; that he should daily sell bills for 200 on 
London, using the proceeds for the payment of the King's debts. He 


hoped by this means to make the exchange more favourable to England. 
The plan was sanctioned, but was shortly afterwards abandoned by the 
Government. Gresham, however, succeeded in attaining his object by 
other methods. 

We cannot pursue this subject in detail here; it is sufficient to say 
that before King Edward's death, in 1553, Gresham had paid all the 
Crown debts and raised the exchange of sterling from 16 Sch. to 22 Sch. 
He had in this way relieved the Treasury of an annual burden of interest 
amounting to 40,000 , converted an export into an import in the case 
of money, and so greatly improved the King's credit that he could ob- 
tain any money he wanted. We have already reported his boast as to 
this service and its political effects. 

Gresham had a tendency to exaggerated self-praise. Thus he reports 
that on the 12th April, 1553, his friend Lazarus Tucher had offered to 
advance the King 200,000 fl. at 12 per cent., at which Gresham was the 
more rejoiced as the Emperor had to pay 16 per cent. 1 Now, on the same 
day the Emperor had sold to the Fugger 30,00 fl. of perpetual annuities 
on the provinces of Brabant and Flanders in return for a capital pay- 
ment of 300,000 fl.; the rate was, therefore, 10 per cent. It is possible, 
however, that bonds of the Eeceivers General and other loans on the 
bourse may have cost as much as 16 per cent. When, however, Gres- 
ham writes four days later that the 100,000 ducats lent to the Emperor 
on the 14th would not hist a month, and that he had neither money nor 
credit, his statements were exaggerated. At the end of 1553 the Fugger 
alone had claims on the Emperor on bonds of the Eeceivers General 
amounting to 92,528 fl., or about 555,000 Carolus gulden, the interest 
being usually 14 per cent., but sometimes 12 per cent. The Fugger at 
this time borrowed money at 10 per cent, and lent it out again at 12 per 
cent, to 14 per cent. 

The fact remains, however, that the Emperor's credit was much 
injured by the methods of Erasso and his associates, while that of the 
English Crown improved through Gresham's skilled operating. Gres- 
ham's merits were clearly shown when on Edward's death Mary had 
him removed and replaced by Christopher Dauntsey, whose clumsy deal- 
ings with Lazarus Tucher soon did great damage to the credit of the 
English Crown. Dauntsey borrowed 200,000 Carolus gulden from 
Tucher at 13 per cent., which became 14 per cent, owing to the condi- 
tions of payment, while the market rate was only 10 per cent. (Novem- 
ber, 1553), and Lazarus Tucher had obtained the money himself at this 
rate. Gresham, recalled in haste to Antwerp, was justified in writing to 
the Privy Council. 

Turnbull, Calendar, Edward VI, Nos. 653 and 655. 


We have a letter from Anton Fugger to his Antwerp agent Matthew 
Oertel written a few weeks after Gresham's report. Anton Fugger ex- 
presses astonishment that the English Queen was again wanting to 
borrow at 13 per cent.: 'it is a great interest, if it be so.' 

Gresham reported soon after that the tightness of the money market 
was not solely due to Dauntsey's relatively unimportant transactions, 
but was also due to the South German cities borrowing all the money 
they could raise at 12 per cent., e.g. the city of Nuremberg did so 
through the Imhof , for the war against the Margrave Albrecht Alci- 
biades of Brandenburg, both in Antwerp and elsewhere. 

In December, 1553, Gresham was ordered to raise in all haste 
100,000 at 12 per cent, at most. He could not do this, and had to 
report that there were indeed two persons ready to advance sums of 
40,000-50,000 Carolus gulden, but they were shameless enough 'to ask 
15 per cent. He had offered 10 per cent, to 11 per cent., but had been 
indignantly asked whether he thought that they did not know of the 
affair with Lazarus Tucher and whether their money was not as good as 
his. The financiers had agreed among themselves not to lend under 13 
per cent. Only Art van Dale and Christopher Pruen had offered 16,000 
at 6 per cent, for six months, but at that time he had no authority 
to borrow for a shorter period than a year. Meanwhile he had received 
the authority, but the Emperor's borrowing had made money tighter. 

' . . . This Bourse of Antwerp is strange - one day there is plenty of 
money and the next none - because there are so many good takers and 
deliverers, that if one will not, another will. Fugger and Jasper Schetz 
are bare of money, and no good can be done with them at present, as 
the Emperor owes about 300,000 /. . . .' l 

There are several contradictions here, to be attributed to a misunder- 
standing. Gresham could not give as a reason for the sudden fluctuations 
in the supply of money the presence of so many sound borrowers and 
lenders. Their presence would make the supply more constant. It was not 
because, but in spite of this fact the supply fluctuated at this disturbed 
time, and this must have seemed 'strange' to one who knew the Antwerp 
market as Gresham did. Gresham wrote soon after that he would not 
rest till the credit of the English Crown was as good as in the last days of 
King Edward. Shortly after he had to borrow 120,000 Carolus fl. at 13 
per cent, from the Schetz, the Ligsalz, and the Fleckhamer; but early 
in January he was able to get 50,000 fl. from the Diodati at 12 per cent. 

It is interesting that at first Gresham had difficulty in getting from 
the merchants the sums they had promised, because the Queen's pro- 
missory notes still bore the late King's seal. Gresham had accordingly 
to add his own signature to the bond for the money advanced by the 
> Turnbull, Calendar, Queen Mary, No. 104. 


Ligsalz, and had to promise to produce either a promissory note provided 
with the Queen's seal or else a certificate signed by the Queen and the 
Privy Council to confirm the legality of the old seal. This difficulty 
raised by the German merchants was removed, when the Italians de- 
clined to pay over their advance on account of a rumoured rebellion in 
England. This also prevented Gresham from obtaining money else- 
where; and it was only on the news of the suppression of the rebellion 
that the Queen's credit rose again. At the time of Gresham's departure 
from Antwerp at the end of February, 1554, it had not entirely re- 
covered from the shock it had received six months before. Some 
months later Mary married Philip of Spain. This event, even before 
it actually took place, notably affected the money market and the 
financial transactions of the English Crown and the Emperor. 

The Antwerp money market, as we have seen, had at this time be- 
come increasingly dependent on the import of Spanish-American silver. 
Most large financiers, especially the South Germans and the Genoese, 
were so deeply engaged in Spain that they would take on no further 
business unless by this means they could get some of their Spanish 
holdings in the form of ready money. The Spanish people pursued with 
fanatical hatred those who sent money out of the country, and the 
Emperor had to bear in mind this temper, which was a chief reason of 
the great rebellion of the Comuneros. The financial policy initiated 
since the time of the Schmalkaldian League by the help of his Spanish 
secretary Erasso was chiefly directed to prevent Spanish finances from 
being overstrained for the benefit of other countries. Since the days of 
Villach, however, this end had proved unattainable, and claims on the 
'Indian gold and silver' were the favourite method for the repayment of 
the Emperor's loans. Under these circumstances the ban on the export 
of money was untenable, and we know that since 1552 very large sums 
had been sent both by the Government and the merchants from Spain 
to the Netherlands and Italy. On the betrothal of the English Queen 
to the Spanish Heir Apparent, the finances of both countries were to a 
certain extent pooled, with the result that the English Crown was 
allowed to draw ready money from Spain. 

Already in January, 1554, this had been suggested to Gresham by the 
Genoese, who hoped in this way to reduce their Spanish holdings. The 
arrangement was, however, only concluded in May, immediately before 
the marriage. We know that the Fugger were also interested in the 
affair as well as the Genoese, and that Gresham travelled to Spain to 
fetch the money. 1 He found there indescribable tightness of money and 
his measures resulted in the immediate bankruptcy of one of the oldest 
banking firms in Seville. 'I fere,' he wrote, 'that I shall be the occasione 
Ct Burgon, I, 149 ft; Turobull, Queen Mary, Nos. 135. 206 fi. 


that they should play all bank-rowte.' If such were the plight of Spain, 
what could Antwerp expect from it ? How was money to be raised for 
the war with France which broke out again in 1555? 

In March of that year, the French King concluded in Lyons a loan on 
so large a scale that it was known as 'Le Grand Parti.' This was a great 
threat to the Emperor, akeady weary both of war and Government. 
His credit was, however, insufficient even to secure the prolongation of 
the maturing debts - 500,000 ducats' worth of these were due at the 
Easter fair, and the merchants would only consent to their prolongation 
on condition that King Philip, then only King of England, should add 
his signature to the promissory notes and would promise to have pay- 
ment made, not in Spain as was originally arranged, but in Antwerp. 
If the statement is correct that the ducat was here taken at 80 gr. 
Flemish, while in ordinary exchange it was only worth 60 gr., the 
Emperor had indeed to pay heavily for the prolongation of these bills. 1 

There was at this time great tightness at Antwerp; even at 3 per cent, 
a quarter there was no money to be had on 'deposito.' There was a 
rumour of the impending arrival of a fleet from Seville and the Canary 
Isles, which was to bring specie, but little credence was given to this. 
Erasso arrived in April, but though he now acted for the English King 
in Ms negotiations with the merchants for a loan, he only succeeded in 
getting 300,000 crowns in return for pledging the Netherlands customs 
on alum. Nothing was to be got without special security. 

In the following months there were several other loans of about the 
same amount; in June 300,000 crowns for the daily expenses of the 
Court, which for weeks had been without ready money to the indigna- 
tion of all the purveyors. It appears that this loan cost over 25 per cent., 
and a previous loan not less. The merchants said that all the revenues 
were pledged till 1557. The pooling of the Spanish Netherlands finances 
with the English injured the English without benefiting the rest. 2 

In August Erasso came once again to Antwerp. The Imperial troops 
were in pressing need of money, but nowhere loans could be raised, 
and the payment had to be compulsorily deferred for a month. Mean- 
while the hope was that a fleet would arrive from Spain with specie. 
The market rate stood at about 12 per cent. The English Crown owed in 
Antwerp, apart from the King's personal debts, 148,256 L Fl. 38,000 L 
of this amount was paid at the Pamas fair by Gresham, who compelled 
the English merchants to advance this amount in Antwerp against 
repayment in London. In the prevailing scarcity of money' the mer- 
chants took this very hard. Gresham managed, however, to bring about 
a momentary improvement in the English exchange, and the credit of 
1 R. Brown, Calendar, VI, p. 26. 
'Brown, VI, pp. 48, 99, 107. 


the English Crown. The payment of 38,000 L of debt was regarded as a 
'Royal payment' and reported everywhere. 1 Gresham applied the pro- 
cess which he had thus tried several times afterwards. But he had once 
more to borrow large sums from the foreign merchants at 14 per cent. 
The Queen in the autumn of 1556 resorted to the old expedient of a 
forced loan at home and obtained a considerable sum at the cost of 
a large increase of unpopularity. 8 

Meanwhile Charles had abdicated in favour of his son, who came in 
for a crushing load of debt and a war with France which continued to 
become more intense. Philip succeeded in the two first years of his reign 
in raising the enormous sums necessary for the war and the payment of 
the interest on the old debts, but only by overburdening his countries 
and overstraining his credit on a scale such as the world had never seen. 

It is quite impossible to give a complete picture of the far-fetched 
methods of Philip's financial policy in these years. We shall deal with 
it later, meanwhile we only give some data in reference to financial 
transactions in Antwerp. 

The Netherlands finance administration, which in 1552 spent only 
141,300 L of 40 gr. for interest and other expenditure in connection 
with the floating debt, had to pay on this account: 

In 1554 285,982 L 

In 1555 424,765 L 

In 1556 1,357,287 L 

In view of this gigantic increase in the floating debt it is all the more 
remarkable that the average rate of interest did not rise, but throughout 
this period varied between 12 per cent, and 14 per cent. It is stated, 
however, that the King had to pay as much as 24 per cent, in Antwerp. 8 

In this instance, however, special transactions were in question, 
e.g. Asientos for Spain, where the money famine had reached its peak. 
The merchants, who could not withdraw their large holdings from Spain, 
tried to avoid increasing them; and if the King forced them to provide 
new advances for Spain they repaid themselves for the risk by corre- 
spondingly high exchange rates. In his extremity the King had on 
occasions to consent to take goods in payment at exaggerated prices, a 
proceeding which would result in an interest rate of 23 per cent, to 24 
per cent. In the same month, however, when such a transaction is 
reported (April, 1556) the Fugger in Antwerp took over 1J million of 
Carolus gulden worth of bonds of the Eeceivers General which paid 
interest at 12 per cent. 

iTurnbull, No. 429-30; Brown, VI, 213; Burgon, 1, 182 fi. 
Brown, VI, 588, 623, 1057; Burgon, I, 192; Tornbull, No. 474. 
Turnbull, Calendar, VI, 421; AlWri, Rdaz., VIII, 297. 


As we have said, everybody was affected by the credit boom, and 
every one wanted to share in financial operations which promised such 
profits for so little trouble. Even the great business houses like the 
Fugger, in spite of their experience and their serious desire to withdraw 
from risky business, gave way to the general tendency and thereby 

It was only in the spring of 1557 that the Antwerp Bourse, which had 
seemed an inexhaustible source, at any rate as far as direct loans were 
concerned, first failed the Government. The city of Antwerp, however, 
which was then in reality a financial agency of the Government, at 
whose disposal the city's credit had to be put without reserve, managed 
to borrow large sums on the bourse at 12 per cent, to 13 per cent.; for the 
city's bonds were generally considered a good investment and the market 
rate in general was only Jl per cent, to 11J per cent. 

Anton Fugger himself wrote to his Antwerp agent: 'I have learnt that 
the Christmas payment is to be prolonged till Easter, and that the city 
of Antwerp will thus help itself out; since one can do no otherwise and 
there is no harm in it, I must let it be.' This shows how little the true 
relation between the Netherlands Government and the city of Antwerp 
was evident even to the greatest financier of his time, in his old age. The 
city at any rate proved the more solvent of the two. The Government 
ceased payment in August, 1557; but the city continued to pay, though 
only because its credit then still continued good, and only sank very grad- 
ually. In point of fact the city was already at this time overburdened 
by tiie debt which it had contracted in the service of the Government. 

It is impossible even to give a rough estimate of the number of 
millions of floating debt, whether direct or indirect, on which the Nether- 
lands Government had to pay interest in Antwerp. The total amount of 
financial transactions concluded on the Antwerp Bourse in the course 
of a year was estimated in 1557 by a Venetian envoy at 40 million 
ducats or crowns. 1 This figure is, however, only meant to give a rough 
idea of the importance which Antwerp had attained as a money market. 

Thirty or forty years earlier floating loans of the Netherlands Govern- 
ment amounting to 100,000 to 200,000 Carolus gulden had been 
sufficient to drive up the rate of interest from 13 per cent, to 27 per cent., 
even though the Government was easily in a position to repay their 
borrowing very soon. Now the Antwerp Bourse lent not to the Nether- 
lands Government alone, but to the Governments of Spain, England 
and Portugal also, year in and year out, many millions which these 
Governments could never repay. Yet the interest never rose much 
over 13 per cent. This is the effect of stock exchange methods even 
in their infancy on the management of credit. 



'T^HE Rise of Lyons. The rise of Lyons was to a far greater extent 
* than the rise of the International Bourse at Antwerp, the conscious 
and carefully tended creation of the rulers of the country. After the old 
fairs of Champagne had fallen into disuse in the first half of the four- 
teenth century, France was without a trading centre of international 
importance. Geneva, meanwhile, had- become important with its fairs, 
and, thanks to the peace and freedom enjoyed by foreign merchants 
there, that city was for long relatively as important a trade centre for 
Italy, France and South Germany as Bruges was for traffic with the 
Northern European peoples and those of the Mediterranean. Notably, 
it is stated by various authorities that the Geneva fairs were specially 
important to the Florentines' trade in money and precious metals. 1 

As early as 1419-20 and 1443-44 the King of France, Charles VII 
(in 1419-20 still Dauphin), had tried to attract the Geneva fairs to 
Lyons by the grant of large privileges, especially the decontrol of the 
trade in money and precious metals, rigidly controlled everywhere else 
in France. The attempt was unsuccessful, though the T^ing confirmed 
the privileges in 1445, 1454, 1457 and 1461. At last, Louis XI was more 
successful. On the 20th October, 1462, he forbade all merchants to visit 
the Geneva fairs, and was able to induce their natural protector, the 
Duke of Savoy, to join in this prohibition, as he was on bad terms with 
Geneva. The Duke bitterly repented this later, as the decline of the 
fair thus engineered did him great damage. 2 

The year 1463 was the real date of the birth of the Lyons fairs, which 
rose very rapidly after that time. The King gave them all the privileges 
of the Geneva fairs. For several decades, indeed, the two were rivals; 
but in spite of all the efforts of Geneva, soon abetted by the Duke of 
Savoy, large international business tended increasingly to go to Lyons, 
both for trade in commodities and more especially for dealing in money. 

Louis XI was one of the earliest of mercantilist politicians. The chief 
economic reason advanced by him in his Ordomnamce of 20th October, 
1462, against the Geneva fairs was the fact 'that French gold and silver 
are daily exported thither.' This was perfectly true. The Florentine 

1 For decay of the Champagne fairs see Bourquelot, Etudes star lea Foirea de 
Champagne (Mem. de 1'Acad. des. Insoript. et Belles Lettree, 2 ser. t. 5), voL H, 
301 ff., esp. Coustumes des foires (Lc. II, 367); Hohlbaum, flans. Urk.-Buch, HI, 
455; Lefevre, Lea finances de la Champagne, p. 38; Borel, Lea foires de Geneve an 
15 siecle, 1892, p. 8). For Florentines in Geneva cf. Borel, Lc. p. 106 ff., 134 ff. 
and passim. 

' Borel, Lo., pp. 13 and onwards. Penoand, Notes el Documents pour eervir Al'Ms- 
toire de Lyon, s.a. 1485. A Genoese Chronicle, Bistor, pair. num. Scriptores, 1, 627. 


money changers in particular did a feverish trade through Geneva in 
French and other coins. They took the coins of full weight home with 
them and had them recoined, putting the light coins again into circula- 

German merchants in great masses to Geneva reached the Italian mints 
without touching France. 

It had already been realized that it was a great advantage for a prince 
if there was a large trade in monetary capital in his dominions. In 1470, 
when the city of Geneva appealed to the Duke of Savoy to support its 
efforts to restore the fairs, it was represented that if the Duke needed 
100,000 or 200,000 gulden, he could easily raise them in Geneva in three 
or four days at fair time, while, as things were, he had to have recourse 
to Lyons, which was both troublesome and risky. If the fairs were 
brought back to Geneva, money would flow in from all sides; if they 
were held out of the country, they drew the money with them, and 
nothing remained in the country except a little customs on goods in 
transit. Moreover, when in 1485 two of the Lyons fairs were temporarily 
transferred to Bourges, the city of Lyons supported its appeal for their 
return with the same reasons. 1 

Undoubtedly this was a chief reason of the steady support which 
Louis XI and his successors gave to the Lyons fairs. For example, a 
special commercial Court of Justice, the first in France, was introduced 
for the fairs, and those who failed to recognize its jurisdiction were 
severely dealt with. Finally, in 1538, exemption from taxation was 
granted to foreigners, especially those from Florence and Lucca who did 
not marry in Lyons and acquire land there. This connection is still more 
plainly evident in 1550, when the King increased the privileges of the 
fairs 'on account of the profit which he derived daily from the great 
dealings in money transacted at the fairs in Lyons.' 2 

The Importance of Lyons in general. The expectations of the French 
Crown in regard to the Lyons fairs were more than fulfilled. Even if the 
trade in commodities could not compare with that of Antwerp, it was 
yet in the traffic between France, on the one side, and South Germany on 
the other, sufficiently ample and many sided. 8 The creation of the fairs 
rendered Lyons vastly more important for the French Crown. What 
Lyons meant for the Crown, either in a political, military or financial 
sense, in the century from 1463 to 1562 cannot be rated too highly. 

* Galiffe, Materiaux pour I'hiaiorie de Geneve, I, 382; P<5ricaud, lo. 

' Cf. Privileges des Foires de Lyon (1649); Vaesen, La Jurisdiction Commercial*. 
& Lyon sous I'Ancien Regime (M6m. de la Soc. Ldtt. de Lyon, 1877). Lettres de 
Louis XI, ed. Vaeeen et Charavay, II, 203, Actes de Francois I, t. in, 10560, 
10695, 10723; IV, 13020, 13790; Rubys, Hietoire de Lyon, p. 376. 

"Nicolay, Deseript. de la vitte de Lyon (1673), pubL by la Soo. dS Topogr, 
histor. deLyon, 1881, p. 159 ff. 

LYONS 283 

Lyons became above all the centre of the large and delicate web of 
political relations between France and Italy. It became the focus of the 
news service for all Europe. In Lyons the Swiss Cantons, without whose 
troops France could not carry on her wars, received their payments. 
Lyons was the great recruiting ground for the French Kings' warlike ex- 
peditions into Italy. Often these Kings themselves lived in Lyons, the 
second capital of France. Lyons also was the channel through which 
the greatest influences of the Florentine renaissance reached France. 

The chief root of all these effects was not in the trade in goods, but in 
the traffic in money and bills. All the French Kings since Louis XI had 
directed their efforts to the increase of this traffic. On this account they 
granted Lyons unlimited freedom of exchange, including re-exchange 
and lending at interest which were elsewhere prohibited. Only the 
English, as hereditary enemies, were excluded from this permission. 
Bill business with Rome was also forbidden: a restriction attributable to 
the complaints of Parliament as to the export of money on account of 
the Papal Curia. All exchange transactions settled at Lyons were sub- 
ject to the strict exchange law, and for the fairs every form of currency 
was granted free circulation. 1 

These measures succeeded so greatly in increasing the traffic in money 
and bills that Andrea Navagero could say in 1528: 'In the four fairs at 
Lyons an infinite number of payments are made on every side, so that 
they form the basis of the circulation of the whole of Italy and a 
large part of Spain and the Netherlands. Herein lies their use for 

We should add that this was also the immediate cause of the advan- 
tage which the French Crown derived from the fairs. Large masses of 
liquid capital, for the time being free, were attracted to Lyons, so that 
the French Crown could capture an increasing quantity of these by 
offering higher interest. When this habit was once established, it served 
as a bait for other capital lying idle outside Lyons and which was pro- 
ducing less interest than the French loans. 

The great importance of Lyons for the finances of the French Crown 
was soon recognized by its opponents, as is shown by the fact that before 
1513 the opponents of the French Crown had tried to induce the Papal 
Curia to take steps against the Lyons fairs. This is proved by a petition 
which the Emperor's envoys in Home brought before the new Pope, 
Adrian VI, either at the end of 1522 or the beginning of 1523. The text 

l Fair privileges of 1462, cap. 2, 8, 7, 8 (Ordinances dea roia de France, XV, 
646). Cf. Ordinances, XV, 204 ff.; Le Glay, Histoirede Louis XI, voL I, 291 &., 
327 ff.; Ficot, Histoire des Etots Generaux, 1, 511 ff. Cf. Journal des Stats Gmeraux 
de 1484 red. par Massdin, p. 699; Monfaloon, Histoire monumentale de Lyon, I, 
347; Pfaicaud, Notes et documents, a. 1485. 

> Relaz. d. Ambasc. Venet., ed. Tommaseo, 1, 36. 


of this interesting effort is as follows: 1 'The Emperor says that both 
Pope Julius and latterly Pope Leo (1513-21) sanctioned the restoration 
of the fairs from Lyons to Geneva, where they were aforetime. The 
Cardinal Medici (later Clement VII) is perfectly informed on this point. 
The execution of this permission would be most advantageous both to 
His Holiness and to His Ma j esty. For if the trade of the merchants, who 
are for the most part subjects of the Church and the Emperor, is once 
more set free, this will diminish the strength of the King of France, as 
in that case that trade (at Lyons) ceases.' 

The obstinate efforts of Charles V to stop the Lyons fairs resulted 
finally in the founding of the Genoese bill fairs - an important con- 

Fairs and Bourse in Lyons. Lyons also had four fairs: the Foire 
d' Apparition des Kois in January, the Foire des Paques in April, the 
Foire d'Aout in August, and the Foire des Toussaints in November. 
Each fair lasted fifteen days; only the South German merchants had a 
further fifteen days of liberty and the Swiss ten days. Generally speak- 
ing, the Lyons fairs kept their full mediaeval significance longer than the 
Antwerp fairs; it was relatively late before they sank into mere quarter 
days; but for the Italians the money and bill transactions which fol- 
lowed the commodity fair had from early times been the principal thing. 
Except at fair-time money, even in Lyons, was hard to come by. In 
Lyons business in money and bills had a peculiar form based on the 
older institutions of the Champagne and Geneva fairs. 2 

The settling days of the fair had from the first formed a separate 
period longer than the fair itself. At the beginning this was two or 
three weeks; later fiscal reasons caused its undue prolongation as in 
Antwerp; finally, its length was fixed by municipal regulations at a 

Before the merchants attended the fair they entered in their 'market 
book' (Italian Scartafacdo) all the payments due from or to them in the 
fair. At the beginning of the fair payments these books were compared 
with one another. In the case of every entry found correct the person 
from whom the payment was due made a mark which was taken as a 
binding recognition of the debt; later he had to sign his whole name. 
The bill - for, generally speaking, there was no question of anything but 
bills - was accepted in this way. If an item was not recognized, the 
owner of the book wrote by it 'S.P.' (sous protest). 

After the acceptances of the old bills there followed the new business 

> Gachard, Correspandance de Charles V et d' Adrian VI, Preface CV. 

Ct Meder, Handettmeh, Nurttberg, 1668, BL 63; Nicolay, Lo. p. 150 ff. (1673); 
Pericaud, Notes et documents, s.a. 1676; Bubys, Histoire de Lyon (1604), p. 496; 
Roberts, Merchants Mop of Commerce (1638), cap. 303. 

LYONS 285 

with foreign markets, which originated either at the preceding fair or as 
the result of the acceptance, or otherwise. Here we meet for the first 
time a peculiar arrangement, the settlement of an official average price 
for each species of bill, the so-called Conto. This arrangement, the 
origin of which is not clear, is first mentioned by the Florentine cleric 
Buoninsegni. 1 

He distinguishes between real trade bills (solo per commodo delle mer- 
canzie) and speculative or loan bills (con oggetto di guadagno, per arte 
senza oggetto di mercatura). At first he thinks only the first sort existed 
and thus the price fluctuated very little. This, however, had lately 
altered, and now most bills were purely speculative or loan bills. Abuses 
had crept in in this connection. Skilful operators had tried successfully 
to settle the price of bills arbitrarily, and they had accordingly formed 
syndicates and had artificially tightened the supply of money and so 
managed to get control of the price of bills. In order to obviate such 
practices and the consequent disputes as to the true and just price, the 
bill dealers had decided to fix average rates for bills as soon as bills 
began to be dealt in at each fair, so that foreign business connections 
could, if necessary, be referred to these rates. 

The process is on the whole correctly stated here. At any rate, later, 
in other fairs, these were the reasons for the institution of the Conto. In 
Lyons this was done as follows: The bill dealers met on a certain day and 
formed a circle (Faire la Ronde); the Consul of the Florentines then 
asked the dealers of the different nations in turn what they thought the 
price ought to be. The answers were noted and the average taken. 
This was the official rate for bills, which was noted in the bulletins (Lauf 
or Ldufzetteln; in Italian lAste) and sent abroad. The dealers themselves 
were naturally not bound by this, their business was left to free bargain- 
ing. Yet the Conto at the beginning had some meaning for the market 
itself, as previously many transactions had been concluded at the aver- 
age rate which had not yet been settled. Later on the proceedings were 
altered in many particulars. The Prevot des Marchands of Lyons took 
the place of the Florentine Consul, and the different rates were given in 
writing. The Conto remained in existence, as an empty form, up to the 
time of the French Revolution, but its practical importance had long 

The payment proper closed the fair. It was affected chiefly by vire- 
ment de parties, giro or soonfro, as follows: Two persons were commis- 
sioned to collect and compare (scontriren) all the fair books. They then 
cancelled the payments against one another, and only paid the balances 

. iTrattatodeicambi,1573. Cf. e.g. Scwcia, l,Qu.5,No. 53 ff., l,Qu. 7,Par.2, 
Amp! X, No. 101; De Turn, Qu. 1 , No. 30 ft.; Roberts, Merchants Map of Commerce, 
301; Rubys, p. 498; Peri, II negotiant, I, c. 25. 


in cash. 1 We note that one unit of account, the ecu de marc or scudo de 
marce, was taken as the basis of all payments, and that the actual pay- 
ments were made in a special currency, originally a pure gold currency, 
but afterwards a mixed currency with a fixed relation between gold and 
silver, only dissolved at the end of the fair. The total result is a peculiar 
organization very modern in most of its chief features, the character- 
istic product of the Latin commercial genius. The fair payments at 
Lyons owe their form to the Florentines, a fact which is clearly shown by 
the development of the Lyons Bourse. The Bourse took its name from 
the business which was first and for long to the exclusion of all others 
transacted in it; it was la Place du Change, or simply le Change. It was 
a square near the Church of St. Eloi, near the single bridge which then 
linked the different quarters of the city on either side of the Sa6ne. The 
bridge still bears the name of the Font du Change and the square also 
retains its name. In 1389 it was called the Place de la Draperie, a name 
it kept for some time after the first institution of the fairs in 1419; at 
that time the square on the other side of the bridge before the church of 
St. Nizier was set apart for the money changers. The 'change' at St. Eloi 
is mentioned in 1489, and probably it had been there since 1462. 2 

The Consular house, the Loge of the Florentines, was here, and it was 
originally the scene of the characteristic acts of the Lyons, fair pay- 
ments, the acceptances, the settlement of the average price and the 
clearing house operations. The historian de Rubys, writing in 1604, 
adds to his account of these proceedings the statement that the Floren- 
tines had introduced exchange dealing and therefore kept the lead in 
this form of business as well as in the fair payments. This is true, but if 
he means that it was introduced two hundred years before the fairs, this 
cannot refer to Lyons, but to France as a whole. 3 

When later the Florentines gradually disappeared from Lyons, the 
leading place in the fair payments fell to the head of the Lyons mer- 
chants, 'Prevot des Marchands. The Place du Change was provided in 
the seventeenth century with a special Loge du Change, which since 
1810 has been used as a Protestant Church.' 4 

The organization of the Lyons system of payments has been much 
admired, and was in fact a notable achievement for the times. The 

1 Speech of Venetian Senator Contarini in 1584 in Latte's Liberia dette Banche a 
Venezia, p. 121. 

> Montfalcon, Hist. Monum. de. Lyon, 1, 462, 510. Registres Gonsvlaires de Lyon, 
1416-23, ed. Guigne, I, 296. Clement, Jacques Cceur et Charles VII, t. II, 352. 

* Rubys, Histoire de Lyon,, p. 496. Pericaud, Notes et documents (Henri HI), 
p. 90, and Archives historiques et statistiyues du department du RMne.t. IX, 332. 

Perioaud, Lo. p. 6, 94; Clerjon, Histoire de Lyon, VI, 148. (Arch, munitip. 
de Lyon, Invent, gen, XVI, 396 fi.). Cf. Vaesen in d. Mem. de la 800. m. de 
Lyon, 1877-8, p. 148. 

LYONS 287 

Spaniards, however, had a still more highly developed system, and at a 
later time the Genoese equipped their fairs with a system of payments 
which far outshone that of the Lyons fair. 

Dealing in Capital in Lyons. In Lyons, like Antwerp, loans were 
usually given the form of the deposits and the Ricorsa bill. The former 
was the more prevalent in the heyday of the Lyons fairs, though the 
Florentines still continued to use the Ricorsa as well. It was only after 
the bull which Pope Kus V issued against it in 1570 that the deposito 
was less often employed both at the Geneva fairs and at Lyons. 1 

There is nothing special to note about the Lyons deposito, and we will 
accordingly content ourselves with a few quotations from German com- 
mercial letters, e.g. Vincenz Pirkheimer, an agent of the Tucher's, wrote 
in 1531 from Lyons: 'At the last Easter fair a considerable sum of money 
was left on our hands, because there was no special use for it. There 
were no bills to be bought, which could have been resold on delivery, 
which else would have come to pass. There are enough good Dittas that 
lend money at 2-2| per cent, till the next fair, but not enough good 
Dittas that want money.' Accordingly, he lent the money for two fairs 
to the treasurer of the Duke of Savoy on the pledge of jewels, or rather, 
he bought the jewels and 'of our grace we may let him redeem them at 
the appointed time.' This brought in interest at 16 per cent. Soon after 
he says: 'There is now no demand for money, and in exchange (au 
change, i.e. on the Bourse) there is not more than 2 per cent, a quarter.' 
This state of things continued, and in 1535 we hear, 'Money is not worth 
more than If to 2 per cent, in Banqua.' 

These were all bourse deposits, but this expression is first used in 
1559. At that time the French merchants complained that every one 
was now ceasing to deal in commodities in order to engage in bill and 
deposit business, i.e. to commit usury. This Nbuvelle Fayon de Dep6ts, 
they said, enriched few and impoverished many. 2 Soon after we note 
the rate for deposits regularly stated at the end of the exchange bulletin. 

The best account of the method of dealing with the Ricorsa bill at 
Lyons is drawn from the treatise on bills of the Florentine merchant 
Davanzati, who describes this business in the middle of the sixteenth 
century on the basis of his own practice in Lyons: 3 'If thou (A) hast 
money in Florence and wilt have exchange in Lyons, because thou 
mayst have profit from the exchange back again, so give to me (B) who 
need money, 64 scudi in Florence, if that be the exchange rate; against 

i Nicolay,Z>e^p^<fetoBe<feIyon (1573 ed. 1881), p. 153. CL alfio Rubys, 
p. 289; P&icaud, Notes et documents, Henri III, p. 113. 

Arch, munidp. de Lyon H.H. IX, p. 629; undated, but probably of the period 


this I promise to have a mark of gold paid in Lyons to Tommaso Sertini 
(D). I give thee a bill on Salviati (C), thou sendest Mm to Tommaso (D) 
so that he may cash it and deal with the re-exchange. The letter where- 
in thou dost this is called the Advice or Spaccio. Tommaso (D) carried 
out thy orders. He pays thy mark of gold in Lyons to Piero (E) and 
receives from Hm a bill on Federigo in Florence (F) in accordance with 
which he (Federigo) has to pay thee (A) 65| scudi in so many days. 
Tommaso sends thee this re-exchange, and when it matures thou hast 
made 1J scudi. Herein, however, thou hast to run the risk of three 
failures, mine, Tommaso's and Piero's. Therefore must thou look with 
Argus eyes at the firm to whom thou shouldst give the bill, him to whom 
thou remittest it and him by whom this second man should have the re- 
exchange drawn. Wherefore those who are not in business are wont to 
give their money to a bank, which deals with the transaction for a 
double charge: 2 per cent, for the trouble and 2 per cent, for the delcre- 
dere for the quarter. The fees in Lyons (Consular fee, charges and 
brokerage) amount to l per cent. A man who does not employ the 
agency of a bank will, after deduction of the above fees, make on an 
average 8 per cent. If a banker is employed, his fees 1 per cent, are also 
to be deducted.' 

These figures are, of course, only rough averages. In view of the 
violent fluctuations in the price of bills, the Ricorsa in two acts as prac- 
tised in Lyons was often very risky. Conditions in Lyons were similar 
to those we have seen in Antwerp. Anyone playing for safety had to use 
the deposito, and anyone not satisfied with the rates paid by sound 
firms on the bourse (buone ditte) - mostly not more than 10 per cent. - 
could lend money to the Crown, which usually paid 16 per cent. This 
was the form of investment to which capital turned more and more. 

The total of the Lyons traffic represented extraordinary sums at any 
rate for the period. Even in 1573, when Lyons had passed its zenith by 
more than ten years, Nicolay says: 'There is not a fair in Lyons, be it 
never so poorly provided, but what millions of gold are dealt in on the 
Bourse.' Even in 1638 the English merchant Roberts writes: 'I have seen 
that in such wise (by clearing-house methods) in one morning payments 
worth a million crowns are settled, without a pfennig of ready money 
changing hands.' 

The Beginnings of the French Crown Loams in Lyons. There is no ques- 
tion of dealing in capital at Lyons before 1463. Even then, however, it 
is a long time before we hear of large borrowing by the French Crown 
from the merchants doing business at Lyons. Louis XI, throughout his 
reign, usually met his extraordinary financial requirements by raising 
forced loans without interest from his subjects. We hear only of small 
interest-bearing loans at Lyons, e.g. in 1467 the King's officials, in order 

LYONS 289 

to pay for war material, borrowed money at the Lyons fair 'a perte et 
interets.' This was unwelcome, and the King ordered the immediate 
repayment of the loan. 1 

Louis XI did not carry on expensive foreign wars. His successor, 
Charles VIII, when in 1494 he was getting ready for his great expedi- 
tion to Italy, had to borrow largely from the Genoese bank of the Sauli. 
This was done at their Lyons factory, for Philippe de Commines reports 
that the loan was ' de f oire en foire,' and cost 14 per cent, for each four 
months. 8 

In the subsequent period the Florentines are mentioned on several 
occasions as lending money to the French Crown, always, however, in 
small amounts. Charles VIII did not require to take large loans at in- 
terest in Lyons because he had at his disposal a less costly source of 
money in the subsidies and contributions of the Italian princes and 
republics. His successor, Louis XII, was a careful manager. In 1512 he 
tried to raise a forced loan from the foreign merchants doing business in 
Lyons, but had to desist on their threatening to leave the city. He was 
more successful with new forced loans from his own subjects. 3 

It was only under the prodigal and warlike Francis I that the loans of 
the French Crown in Lyons reached the grand scale. We know that in 
1516 the Ki>g owed the Florentines in Lyons 300,000 ecus, and in 1529 
600,000 ducats. About this time the 'Good German,' Hans Kleberg, 
began to have dealings with the French Government, and the whole 
development attracted great attention from the Hapsburgs, who tried 
from the first with great pertinacity to deprive the French Crown of the 
financial strength it derived from the Lyons fair. 

A report of 1521 shows us the way the Crown managed its financial 
dealings in Lyons at this time: 'The King sent lately from his Parliament 
in Troyes the directors (Generaux) of his finances to Lyons, there to raise 
money for his requirements. They are returned and have borrowed at 
interest about 200,000 ecus from the bankers and merchants of Lyons.' 4 
In his bill transactions with Italy, which were mostly advances, the 
"King at this time already employed a permanent agent, Pier Spino, who 
followed the Court; but in Lyons the Crown had then no permanent 

The French Finance Administration had now got over its dislike of 
loans at interest; but as we have seen the Florentines were not disposed 
to lend the King all he required for his swollen expenditure on war costs 

* Lettres de Louis XI, t. HI, p. 190. 

* Memoirea de Philippe de Camynes, ed. Dupont, H, 292, 331. 

Vaesen in M 6m. de la 8oc. Kit. de Lyon, 1877-8, p. 25; Segtstres des d&ibera- 
tiaw du bureau de la viUe de Paris, 1. 1 (1499-1526), p. 204 
*ibl. de VEcdU du chartes, XX, 372. 


and personal luxury. What his thrifty mother gave him from time to 
time or the many loans of the Pope and different Italian states, all dis- 
appeared like drops on a hot stone. Down to 1522 the King's financial 
straits are described in the strongest terms; in spite of all his boasting he 
could never dream of keeping the promises with which he wished to buy 
the Roman Crown. 1 

At the crisis of his financial difficulties in 1522 the directors of finance, 
who had travelled to Lyons for the purpose, managed to raise a fairly 
large loan from the foreign merchants. The Strozzi contributed 31,000 
ecus, the Guadagni 22,000 ecus, Hans Kleberg 17,087 ecus, etc. This is 
perhaps the first loan which can be called a bourse loan. It was not, 
however, carried through without compulsion; at any rate, shortly 
before the property of the Florentines was confiscated at the order of the 
Bang; while immediately after the loan they were granted new privi- 
leges. 2 This same year, 1522, is to be considered the year which saw the 
beginning of the French funded debt. 

The money famine was now somewhat abated; but the King did not 
keep his promises to the merchants, and this destroyed his credit. The 
historian Guicciardini, who must have known, gives as one of the causes 
of the slackness of the French war operations in 1526 that the King had 
lost his credit with the Lyons merchants and could get little or no loans. 

This situation remained unchanged in the following years, and finally 
made the Peace of Cambrai necessary for the French. This peace en- 
tailed heavy financial obligations on France. The ransoms of the King's 
children amounted to 1,200,000 ecus; the power of the dynasty and the 
loyalty and capacity to pay of French people were now strikingly illus- 
trated, for the notables granted this enormous sum, which was then 
compulsorily assessed as a loan and paid without too much grumbling. 8 

In the period of peace which followed, only once is there any talk of 
a large Crown loan in Lyons, and it is not certain whether it was ever 
carried through. A Tucher agent reports in 1532 from Lyons that the 
King wanted to raise money there in order to send it to Switzerland and 
Germany, 'God wot why or whither.' We know from other sources that 
the King sent that year and in the following years considerable sums as 
subsidies to the German allies, and that he needed a great deal of money 
for the pay of the Swiss mercenaries; but we do not know whether he 

1 Brewer, Calendar, II, Nos. 253, 522, 626, 1393, 2349; Baumgarten, Gesehichte 
Karls V, voL H, pp. 38, 96. Of. also Desjardins, H, 899, Actes de Franpna /, No. 

Mete* de Irony&t 1, Nos. 1629, 1594 and 17485. 

* Journal d'un bourgeois de Paris sous le rigne de Franfoie I, ed. Lalanne; Gail- 
lard, Histoire de Francois I; Brewer, Calendar, IV, NOB 789, 1072; Cdeccion de 
document ineditos, voL XIV, p. 254; Acted de Francois I, NOB. 4385, 4623, 6492, 

actually borrowed this money in Lyons. In any case, it was only after 
the outbreak of war in 1536 that the scale of the loans became very large. 
The Work of the Cardinal de Tournon. The great French publicist 
Bodin in his famous work Les Six Livres de la Republiyue, published in 
1577, in the part dealing with finance inveighs against interest-bear- 
ing loans, which he designates 'the Ruin of Princes and their Finances.' 
He then adds in regard to such loans: 'This financial expedient was in- 
troduced into France in the year 1543 by the Cardinal de Toumon, who 
was induced by certain Italians to represent to King Francis I that 
there was only one way of attracting money capital from all sides to 
France; for which purpose the bank must be formed at Lyons and 
money borrowed from every man at 8 per cent, interest. In reality, 
however, what the Cardinal wished was to find a safe and profitable 
investment for 100,000 ecus which he had in his own coffers. His pro- 
posal was accepted, and the bank was opened. Every one invested 

Francis I owed the Bank of Lyons 500,000 ecus. 1 

Three distinct springs of action are to be distinguished in this remark- 
able statement: first, the action of the Cardinal; secondly, the participa- 
tion of the Italians; thirdly, the organized dealing in capital which re- 
sulted. Of these we will here discuss the first two. 

In the first place, it is not true that interest-bearing Crown loans were 
introduced into France through the Cardinal de Tournon, but it is right 
to say that he largely extended their scope. This development dates, not 
from 1543, but from 1536, though in 1543 it took on a new character 
which Bodin describes correctly as to its general tendency, though with 
certain errors in detail. The Cardinal de Tournon was one of the most 
important French statesmen of the time. It was he who had carried 
through the negotiations in Madrid as to the ransom of the King taken 
prisoner at Pavia; and he had been employed on many other diplomatic 
missions, most recently in Italy. In 1536 he was governor of the Pro- 
vince Lyonnais. In this position, and perhaps even previously, he came 
into contact with the great Florentine bankers who had their head- 
quarters in Lyons, the Strozzi, Guadagni, Capponi, etc. He managed 
to arouse in them the hope that the King of France would free Florence 
from the rule of the Medicis and so induced them to be willing to lend to 
the King. 

When in 1536 the Emperor invaded the South of France, the Cardinal 
succeeded in obtaining large floating loans from the Florentine bankers, 
at first 30,000 livres and then again 40,000 livres at 3 per cent, per 
fair. The details are not clear, but the Cardinal's large share in the busi- 
ness is evident. At the request of the bankers he had to act as a co- 


signatory. 1 Still larger sums, however, were then raised, partly on com- 
pulsion and in part voluntarily through loans of the cities and the 
clergy. For the second time since the introduction of this method of 
raising money large annuity loans were contracted with the cities, to 
which the royal revenues were pledged in return. Since the loans were 
not repaid, the revenues remained in the possession of the cities. For 
example, in 1530 Paris lent 100,000 livres and Lyons 84,733 livres. 
The latter transaction was carried out by the Cardinal de Tournon, who 
also had charge of the lease of the salt tax for large parts of the country, 
a business in which he employed the Florentines. 

As warlike operations ceased in 1537, the need for further extra- 
ordinary receipts ceased and did not reappear till the renewed outbreak 
of the war in 1542. Only in 1541, on the pretext of a coming attack from 
the Emperor, the King recruited troops in Germany and raised a loan 
from the bankers and merchants of Lyons, which seems to have had 
the character of a forced loan.* 

We have a Venetian ambassador's report of the year 1542, dealing in 
detail with the French finances. The French King, it is said, if he were 
economical, could easily lay by a million crowns a year. It is added that 
this is not the case and that the 300,000 ecus set apart for his menus 
plaisirs did not suffice. Items on the expenditure side are: Pensions, a 
million livres. Gifts, half a million. Extraordinary expenses, 400,000 
livres, etc. The annuity debt begun in 1522 had accordingly consider- 
ably increased. The report distinguishes these funded annuity loans 
from the floating loans at interest. The ambassador says that on his 
departure the State Treasury was empty and 'people begin to think 
already of borrowing money at interest from the merchants, as I ob- 
served on my passing through Lyons.' The raising of floating loans at 
interest in Lyons was undoubtedly a regular financial expedient of the 
French Crown from 1542-3 onwards. 

The Period from 1542 to 1547. We are indebted for our first exact 
information as to this period to the English envoy Paget, who was then 
staying in Lyons. 3 He writes that the King of France has no money and 
little credit, as many old debts are still unpaid. He states in contrast the 
large loans which the Emperor had raised in a short time in Antwerp, 
Augsburg and Genoa. 'Great efforts are made daily to obtain money. 
For while here in Lyons and in other markets people who have liquid 


Invent, generate, Vm, p. 175 ff., NOB. 29, 157; XH, p. 42, No. 81; P&ioaud, Notes et 
documents, aa. 1637 [38] 22/1; Heury, Histmre du Cardinal de Tournon, p. 146; 
Antes de Francois I, Noa 8661, 8730, 8812, 8824, 8867, 9291, etc., and NOB. 21123, 

Gayangos, Calendar, VI, 1, p. 381. 
Oaiidner, Col., voL XVH, Nos. 

554 and 589. 

LYONS 293 

capital, and also widows and orphans, are wont to invest their money in 
banks at 5-8 per cent., the King will now take all this and promises for 
this purpose 10 per cent, interest.' 

The 10 per cent, refers only to natives, the King promised foreigners 
16 per cent. Under such conditions he was able, in spite of his bad 
credit, to raise 400,000, of which 

the Florentines advanced 200,000 francs 

the Welser 50,000 

the Lucca merchants 100,000 

the French merchants 50,000 

It is certain, however, that Cardinal de Tournon, who once more 
raised this loan for the King, must have exerted more or less heavy pres- 
sure on the merchants. The Welser declared later to the Emperor that 
they had had to lend the King 12,000 crowns in order to stay in the 
country, which otherwise they would not have been allowed to do; the 
money was sent from Antwerp to Lyons, in spite of the Emperor's pro- 
hibition. Gaspar Ducci and Hieronymus Seiler were also interested. 
The Seiler letters show that the Welser and the other merchants were 
attracted by the interest, which was unusually high for the period. It is 
indisputable, however, that compulsion was also exercised. 1 

In 1542 and 1543 further sums were borrowed in Lyons, but we have 
no details. We only know that Hans Kleberg, 'the good German,' was 
interested himself and brought in other German merchants. At the end 
of 1543, however, everything seems to have been repaid. 2 

The loans of the Crown so soon became habitual in Lyons that a com- 
mercial handbook appearing in Antwerp in 1543 states that the ex- 
change rate in Lyons depends, amongst other things, on whether the 
King is borrowing much there or not. 8 

In the spring of 1544 safe conduct was withdrawn from the Germans 
in Lyons because they supported the Emperor. They were hard pressed 
and some even were imprisoned. The Tucher agent, who reports this, 
adds that the French Court knew well that the 'Germans in Augsburg 
had much money to lend to the King.' This they must have done, for 
they were soon well treated again, and in June the Ki"g paid their 
maturing claims, while those of the Florentines and Lucca merchants 
were prolonged. This year and the next the Cardinal de Tournon was 
the King's chief representative in all monetary transactions in Lyons. 4 
In the year 1545 other agents became more prominent. 

1 Actes de Franfois I, t. IV, Nos. 12636, 12642, 12646, 12651, 12742, 22570. 

' Ehrenberg, Hans Kleberg (Mitth. d. Ver. f. Gesch. d. Stadt N-urnberg, VIH, 
21); Antes de Franyns I, t. IV, Nos. 13340, 13491, 13509. 

Jan Impyn, Nieuwe instructie d. looffl. consten d. rekenboecks, Antw. 
1543, foL 15. 

*4<# de Inmfois I, t. IV, Nos. 14008, 143S7, 14479. 


A Tucher agent reports in 1545 that he had been approached on 
'change by Hans Eleberg, who asked him to write to his masters in the 
following sense: An official often employed in the financial trans- 
actions of the French Crown, Martin de Troyes (also called Maitre 
Martin or Sieur Martin), who owned a house in Lyons, had asked 
Eleberg to consult his friends as to whether they would lend the King a 
sum of money at Easter. Kleberg tried to bring out clearly the profit- 
ableness of the business, praising his security and the high rate of 
interest, he said that the best South German houses were ready to come 
in. He had already raised 40,000 ecus and was ready to let the Tucher 
have a share also. He himself wished to invest largely. He had always 
carried through his with good repute and without talk. The profit in this 
business was 'godly and fitting.' * The Tucher did not, as we know, wish 
to undertake this kind of business, but the loan came about, the Germans 
advancing 50,000 ecus and the Italians 100,000 ecus, making a total of 
340,000 francs. 

Later the merchants became very nervous at the report that the King 
was mortally ill; if he should die a quite different government was ex- 
pected. In short, 'Every man is heavie because the King is so sick and 
weakly.' The merchants accordingly desired that the Dauphin should 
act as co-signatory, and Kleberg acted as their representative in bring- 
ing his wish before the King. He immediately granted this request and 
declared solemnly that the 'gifts' which he had made or should make to 
Kleberg and the other foreign merchants, as compensation for the loans 
they had made to him, were to be regarded as valid bonds without the 
merchants needing to trouble themselves on that account. 8 

In Antwerp also propaganda for the French loans was carried on 
by the Florentines settled in Lyons, especially by the Salviati through 
the agency of Gaspar Ducci, and we know that this was not unsuc- 
cessful. In August of the same year further loans were concluded in 

In December, 1545, it is reported that the King had paid back 
300,000 ecus, 'whereat the Germans who had lent him money were not 
pleased.' However, in January, 1546, he once more borrowed 300,000 fr., 
and in March Kleberg was again approached to prepare himself and 
the members of his syndicate for further advances; the King, it was 
said, would engage himself in what manner the Germans wished. In 
September Jakob Sturm came to Lyons from Strasburg, commissioned 
by the Schmalkaldian League, in order through Kleberg' s agency to 
borrow money for the war against the Emperor. He found Kleberg on 
his death-bed and thereupon applied in his need to the King, who at 
first declared his readiness to repay the merchants the half million ecus 
* Ehrenberg, Hans Kleberg, p. 23 fi. Ibid., p. 26. 

which he then owed them in order to help the Schmalkaldians. 
Finally, through the agency of Marechal Strozzi the following arrange- 
ment was arrived at. The King paid 100,000 crowns to the Marechal, 
who paid the same amount to the merchants to whom the King owed 
money. The merchants lent it to the Protestants, and the princes en- 
gaged themselves to the cities and the cities to the merchants. The 
King said everything must be kept very secret because, is it happened, 
he was at peace with the Emperor. According to another version, the 
King himself borrowed money in Lyons and had it conveyed to the 
Protestants. The rate for Crown loans was then 12 per cent, per annum. 1 
Shortly afterwards, however, the King again borrowed at 4 per cent, per 

In October, 1546, Sebastian Neidhart and ffieronymus Seiler ordered 
that half the capital of the company which they had formed, together 
with Alexius Grimel and others, should be lent to the King of France. 
Grimel thought that this would be expedient, if no other safe invest- 
ment were forthcoming. Good firms in Lyons were ready to pay 3 per 
cent, per fair; and it would be best to be content with this. A part of the 
capital was, however, lent to the King. The Welser's representative in 
the Emperor's camp wrote home in February, 1547, that, considering the 
violent and deceitful policy which the Emperor's counsellors had entered 
on, it was small wonder that so much money was now withdrawn from 
the Netherlands Court and lent to the French Court, 'though mayhap 
in time even that investment may be still less fortunate.' We know too 
that the Haug in Augsburg at the Easter fair in 1547 lent the French 
Crown 36,000 crowns at 4 per cent, per fair. 

King Francis I died on 3rd March, 1547. Bodin asserts, and many 
authorities have repeated after him, that at the time of his death the 
King had in ready money, not only the half million ecus which he owed 
'the Bank of Lyons,' but 1,200,000 ecus as well in the Treasury. Others, 
on the other hand, say that there were only 800,000 ecus. 2 

In June, 1547 -shortly after the King's death -an envoy of the 
Emperor's at the French Court reports that 'The French ministers and 
others have often said that the late King had left enough money in the 
Louvre to pay an army for six months and that this money was not to 
be touched. Nevertheless, 200,000 ecus have been taken from it and put 
in the hands of the Tresorier de 1'Epargne, who had no money, or rather 
who had to pay out 500,000 fr. Moreover, there was less money in the 

1 Augsbg. Stadtarohiv, Litteralien und Sielersche Garrespandenz. Of. Ehrenberg, 
Kleberg, p. 31, and Kius, D. Finanzwesen d. Ernestin. Houses Sachsen im 16 
Jahrh, p. 78. 

> Bodin, Lc. pp. 893, 896, 905. Traicte des finance de la France (1581) in den 
Archives emieusea de I'Jiistoire de France, 1 ser. t. IX, p. 394. For what follows, 
Reave historique, V, 118. 


Louvre than had been reported - 500,000 or 600,000 ecus at most. 
Money is still owing to the Lyons merchants, and it is considered import- 
ant to pay them their interest in order to be able to have their help 
should occasion arise. The present King has recognized as King his 
predecessor's debts at the request of the merchants who sent a special 
representative to the Court for this purpose. In short, the finances are 
not so brilliant as is boasted.' 

The tendency to represent the royal finances in too rosy a light was of 
long standing in the case of Francis I and his ministers and counsellors. 
Bodin, who handed down these boasts as truth, was influenced by the 
wish to represent the reign of Francis I as the golden age of French 
finance in contrast to the financial mismanagement which reached its 
climax for the sixteenth century in his own day. Though he could not 
deny that in Francis' last years the debts grew apace, he said that the 
money so obtained (at 12 per cent, or 16 per cent, a year) was used by 
him, together with his savings, to form a large State treasure. There is a 
grain of truth in this. In the last years of Ms reign in peace-time Francis 
had collected money in order to be better prepared than formerly in the 
event of war. There was, however, no question of such sums as those 
quoted by Bodin. 

The case is similar to Bodin's other statement which we quoted at the 
beginning of the previous section. We now know that Cardinal de 
Touron initiated a new era for French Crown loans from 1542 onwards. 
Bodin gives as the true inwardness of this movement that the 'Bank of 
Lyons' was formed to attract money from all sides and that it succeeded 
in the attempt. Bodin used the same expression 'Bank of Lyons' 
previously elsewhere, while contemporary writers only speak in general 
terms of the introduction of banking through the Italians. 1 Bodin 
has often been interpreted as if he meant that a bank was created in 
Lyons in 1543. This is, however, an erroneous meaning for the phrase 
'Etablir la Banque a Lyon.' Apparently this was meant to designate 
all banking and bill business and not a definite public bank, which 
certainly did not then exist in Lyons. 2 

The following facts are well established. Since 1542 the Crown had 
been engaged in a conscious effort to attract monetary capital from all 
sides to Lyons in order to be able to employ it there for the Crown loans. 
This end was attained by giving high interest and by using as agents the 
Italian and German merchants and bankers trading in Lyons. The 
Cardinal de Tournon as prime mover had often to apply pressure to 
attain his end. Certain specially prominent merchants, the Salviati 

i Of. Bodin's Besponeio ad Paradox* Malasfretfi, and his Diteom <rnr 
de VExtr&me CherU. 
' Cleirac, Commerce des Lettres de Change (1656), 

and Hans Kleberg, bad to undertake propaganda for the French, loans, 
both in the market and outside. Capital was attracted by the high rates 
of interest and the punctuality with which the Grown had the sense to 
pay them, as well as by the manifest anxiety of the French Crown to 
meet the lenders' wishes. This was the more easily done as the Em- 
peror's financiers at this time did their best by their violence and deceit 
to scare away capital. Bodin's statement that the innovation was due to 
the Italians is confirmed by the fact that at the same time in Antwerp 
Caspar Ducci was trying to do the same thing for the Emperor and the 
Court of the Netherlands, though at Antwerp methods were uglier and 
propaganda less skilful than at Lyons. It is significant, however, that 
the English agent Stephen Vaughan reports from Antwerp in February, 
1545, that the French King had summoned Gaspar Ducci in order to 
organize his loans on the Antwerp model. The aim was similar in both 
places and to a certain degree the methods and persons engaged in them 
were identical. Bodin's statement that Cardinal de Tournon was only 
consulting his private interest is a gross exaggeration, though, of 
course, it is probable that he managed to unite his own interests with 
those of the Crown. 

The Period from 1547 to 1551. According to several independent 
authorities, at the time of his death King Francis I owed the merchants 
of Lyons at least half a million ecus. This, however, was a trifle com- 
pared with what happened under Henry II, who was his father's equal 
in his delight in war and his superior in prodigality. 

In December, 1547, there began to be talk of large new loans. In 
Lyons, floating loans were raised amounting to 300,000 or 400,000 
ducats, and at the same time 10 per cent, annuities for 100,000 francs 
were sold, and the capital value of these, a million francs, was about 
equal to the amount raised in floating loans. 1 

In 1548 a Venetian envoy at the French Court reported to his 
superiors the following interesting project which was then under con- 
sideration: 'I have learnt that the King intends to open in his kingdom 
four banks, in Paris, Eouen, Toulouse, and Lyons. Anyone depositing 
money in them is to receive 8 per cent, and to receive bonds of the 
States General for capital and interest. If the King needs money he will- 
use the deposits in the banks, which otherwise will be lent out at 11 per 
cent.' 2 

It is interesting to find such a scheme under consideration at the 
French Court, certainly on the advice of the Italians. It confirms our 
criticism of Bodin's statement. Still more important is the fresh light 

iDesjardins-Canestrini, Negoc. dipt, de la France avec la Toscane, VI, 219; 
Vfihrer, jffwtotre de la Dette publigw en. France (1886), I, 21, 
' Pesjardins, l.c. HI, 221. 


it throws on a little understood measure of the Trench Government in 
creating bourses in these cities then mentioned as the localities destined 
for the creation of banks. 

In July, 1549, the King issued an edict declaring that the city of 
Toulouse had less trade than its good situation would warrant because, 
unlike Lyons, Antwerp, and other great commercial cities, it did not 
possess a place known as 'Change, estrade ou Bourse,' where the mer- 
chants assembled twice a day to do business: whereby the costly wares 
of foreign countries were attracted and home commodities were more 
easily converted into money. The citizens of Toulouse had brought all 
this to the notice of the King. He accordingly ordained the institution 
there of a Bourse Commune on the model of the Change of Lyons, and 
he granted all the same privileges enjoyed by the merchants of Lyons, 
especially the special commercial jurisdiction. In 1551 further regula- 
tions were issued, of which the following may be instanced: The 
habitues of the bourse might lend to one another at interest up to 15 
per cent, without being liable to be punished as usurers. They were to 
use for bills amongst one another the strict shortened form which had 
been in use at the Champagne fairs and was still in use in Lyons; they 
were to exercise the calling of money changers or bankers without the 
necessity of a special concession. 

Under similar conditions a bourse was founded in Rouen in 1556, in 
Paris in 1563, and in other French cities later. This action, and espec- 
ially the general introduction of commercial jurisdiction in France, is 
generally ascribed to the Chancellor Michel 1'Hopital, who urged this 
step in a speech before the Paris Parliament in 1560. He was, however, 
certainly not concerned in the creation of the Bourses of Toulouse and 
Rouen, and the legal aspect of the matter in which he was chiefly 
interested did not at first become prominent. At first attention was con- 
centrated on the bourse as an economic institution from which a mar- 
vellous increase in trade activity was expected. The Government 
wanted to try to do for other towns what had been so successfully done 
at Lyons, with the intention, it must primarily be supposed, of increas- 
ing the means of satisfying its own financial requirements. This aim 

remained for the time the only place where the Crown could borrow, and 
the method of borrowing remained at first much the same as before. 
The loans, however, increased in size with an ever widening circle of 

For example, in 1549 the only loan made to the King was that of 
100,000 crowns from the well-known firm of Neidhart, Seiler and Com- 
pany; the greatest part of this was held by Sebastian Neidhart. The 
following were also interested: Hieronymus Seiler, Matheus PfLaum, 

Georg Muelich, and Wolffgang Langemantel, all of Augsburg. By 
September, 1550, the claims had grown to 123,214 crowns. The King 
paid in 1549 in Lyons 16 per cent., though the rate for commercial 
loans (deposito) was only 10 per cent, to 12 per cent. For the last time 
on this occasion some Genoese (Gianbattista and Benedetto Fornari) 
seem to have been interested in the French commercial transactions; 
this, however, was discovered and severely punished. 1 

The South German merchants were already eagerly on the look out for 
the French King's bonds with their high rate of interest, as is shown by 
a letter sent on 6th February, 1550, by Andreas Imhof in Venice to 
Paulus Behaim in Nuremberg. 'I hear that thou wert too late with the 
1,000 crowns to lend to the King of France. A piece of good fortune has 
been slept away. If a good sum had been lent him at the beginning, it 
had already been received back twofold and his money could have been 
done without.' This refers to the reluctance of the old Endres Imhof, 
father of the writer and head of the Imhof business in regard to financial 
transactions of this kind. It would have been better if in this matter he 
had never given way to his sons and young kinsmen. Paulus Behaim 
was able to carry out his scheme of lending 1,000 crowns to the King of 
France in September, 1550. Willibald Imhof sent him the good news 
that he had been able to invest the sum under the name of the Cenami, 
who gave him J per cent, on the capital. The business was done through 
an Italian broker. Imhof adds: 'I could not do better. Before I came 
those who wanted to take up the King's bonds were giving 1 J per cent. 
But yesterday there was largezza (easy money) and they were not 
offering 1 per cent, for a place with the King; but things change very 
quickly.' We hear for the first time of the King's bonds being at a dis- 
count and of fluctuations in price. In November Imhof writes: 'Had I 
tarried longer to invest thy money with the King I had failed altogether, 
for the King would have naught. If thou wilt, thou canst have thy 
money and l per cent, thereto, but on such terms no one will come 

The rate for the King's loans fell during 1550 to 3 per cent, per 
fair = 12 per cent, per annum. Even at this rate, however, capital 
flowed in. In October, 1550, we are told that the King's credit was 
excellent because he always paid the interest promptly. He owed the 
merchants 1J million ducats already, and money was sent daily from 
Antwerp to Lyons. A Florentine historian says of the year 1550: 'In 
order to rival the Emperor in his loans, the King set up a Monte in his 
kingdom, and borrowed from any who would lend. He paid the interest 
every four months and restored the capital on demand. Hence so much 
money came together from all sides that within six months the King 

* Bonfadio, AnnaK d. cose de Gemovesi (1528-50) ed. Ptuachetti, p. 191 fi. 


owed over three million ducats, whereof more than 800,000 were said to 
belong to the Florentine merchants.' 1 

This was an exaggeration; there are several obvious mistakes. The 
state of things described only came to pass some years later. The 
statement is important as a proof that the large loans of the French 
Crown were gradually creating a new organization for dealing in capital 
which excited universal interest and which had as yet no settled designa- 
tion. Other steps were soon to follow. 

The Period from 1551 to 1557. In February, 1551, it is stated that the 
Kg was continuing to pay 3 per cent, per fair and would only pay 4 
per cent, if war were renewed. In August it was thought that the King 
might well pay 4 per cent, and would do so, if he were seriously pressed, 
'but no man will; the Italians are content with 3 per cent.; yet there are 
some who would gladly withdraw at a loss of 4 per cent.' Those persons 
were well informed. In Italy fighting had already begun between the 
Emperor's troops and the French. This was followed in September by a 
definite breach and the end of the year saw the treaty between T^"g 
Henry II and the German Protestants, especially Maurice of Saxony. 

In October, in view of the unfavourable course of the war, the Imhof 
also wished to sell their claim on the "King and were ready to lose 5 per 
cent. Their representative was only able to get rid of 2,000 crowns at a 
loss of 6 \ per cent. Every one wanted to sell and soon no one would buy 
even at 7-8 per cent, discount. A fortnight later the Imhof were ready 
to sell at 8 per cent, below par; but even at 10-12 per cent, discount 
buyers were not forthcoming. In November feeling improved a little; 
small parcels of the King's bonds changed hands at 8| per cent, dis- 
count. Willibald Imhof could not advise Paulus Behaim as to his hold- 
ing, 'for the great lords have it all their own way.' His 1,000 crowns was 
sold at a loss of 8-8$ per cent. 

At the December settling day the King gave the money market a joy- 
ful surprise by repaying 200,000 crowns. This so greatly improved his 
credit that he was able temporarily to reduce to 3 per cent, the interest 
on his loans, which had risen to 4 per cent, per fair. Those who had sold 
at a loss were very sorry for themselves. Paulus Behaim wished once 
more to invest 1,000 crowns if 4 per cent, per fair were to be had. 
Willibald Imhof answered in January, 1550, that the King was disposed 
to pay 4 per cent, per fair to those who would not only extend their 
loans but would lend 50 per cent, in addition. The temper of the market 
had already gone round again, most people wishing to be relieved of 
their holdings. Money was very plentiful. On good commercial paper 

* Segni, letor. Fiorent. ed. Gargani, p. 488. Cf. Turnbull, Calendar, Edward VI, 
No. 248. Report 21 October, 1550: 'Luge sums come daily from Antwerp to the 
bu* of Lyons,' 

only 1J per cent, to 1 J per cent, per fair (5 per cent, to 6 per cent, per 
annum) was paid. At the beginning of 1552 the market rate had once 
more risen to 2| to 3 per cent, per fair (11 per cent, to 12 per cent.) as 
the King was once more borrowing largely and paying 15 per cent. 'It is 
a fine profit for him who can take it' was the opinion of an agent of the 
Tucher in Lyons. This was the time when King Henry II, through his 
treaty with the German Protestant princes, took Metz, Toul, and 
Verdun. Unfortunately there is no doubt not only that this step was 
put in his power by German dissensions, but also that German capital, 
in spite of the increased stringency of the Emperor's prohibition, took 
part in the loans which he then raised. Authentic information is lack- 
ing for the year 1552. For 1553, however, there is a complete statement 
of the sums which the King owed the Lyons merchants at the Easter 

The Germans according to this had claims amounting to 700,000 
crowns or ecus; 200,000 or more of this amount was, however, held by 
the Swiss. The Florentines' holding amounted to more than half a 
million; that of the Lucca merchants, Venetians and Portuguese, to more 
than 200,000 crowns. The total amounts to 1,463,375 crowns, 'whereof 
the interest or "Don," reckoned at 4 per cent, for each fair, amounts to 
about 58,535 crowns.' 

This is confirmed by a direct statement from Lyons in October, 1553, 
which says that in addition to the half million gold which the King 
owed at the last fair he borrowed 400,000 fr. 1 This information, un- 
questionably correct, shows that at the Easter fair, 1553, the King was 
owing the merchants of Lyons about 1 J million crowns; that he was once 
more paying 4 per cent, per fair; and that he went gaily on getting into 
debt though there was an armistice between him and the Emperor. He 
had, however, to defend Corsica, which he had lately taken, against the 
Genoese, who were supported both by the Emperor and the Duke of 
Florence. Pietro Strozzi was in command of the French troops. Soon 
money was to be needed on a different scale. 

About this time there began to be complaints in France also that deal- 
ing in commodities was declining, while trade in money and bills was 
flourishing. This fact is specially striking in a protest made by the 
French dealers in commodities against an agreement of the foreign 
bankers in Lyons relative to the kinds of money to be taken in exchange 
payments. The foreign bankers are here accused of coming to France 
only for their own interest, in order to attract to themselves all the specie 
in order to export it. The new-fangled deposit business, it is said - 
'usury,' to call it by its other name - enriched only the few and ruined 

1 Tunibull, Calendar, Queen Mary, No. 57. The ecus or crown was then worth 
2J livres tournois or francs. 


solid dealing in commodities so that many commodity merchants now 
deal only in money. Dealing in exchange is stigmatized as barren. 
These complaints later on were echoed loudly elsewhere and had 
momentous consequences. 1 

We have little information as to 1554. We hear of a loan of 40,000 
ecus, which the King borrowed at the August fair at 4 per cent, per 
quarter. According to Bodin's account the Capponi, the Albizzi and 
tiie South German merchants must have lent still larger sums, for his 
dates are not wholly reliable. He says that the interest in each case 
was added to the capital. This, however, was only done later; in the 
period 1554 to 1557 the interest was paid each fair time at 4 per 

Bodin adds the observation that King Henry meant to attract capital 
by paying higher interest than the Emperor and the King of England, 
but that by so doing he gradually undermined his credit, 'for the best 
economists and calculators judged that at the last he would be able to 
pay neither capital nor interest since the interest with compound 
interest amounted to 18 per cent, at least.' 

This was quite true and we know that not only cautious merchants 
like Anton Tucher, but also the much less prescient Welser had expressed 
this opinion ten years before. In the actual period before us the 
financial situation of the French Grown was judged by most capitalists 
very optimistically. 

The year 1555 is remarkable in the financial history of the sixteenth 
century for being the year of the 'Grand Parti.' Any prince's loan was 
then called Parti, or in Italian Partite ; the largest loan contracted by 
the French Crown in the sixteenth century was accordingly 'Le Grand 
Parti.' It was the great or common investment as contrasted with the 
later Partiti Particolari. It was formed by a combination of all floating 
loans hitherto raised by the French Crown in Lyons, together with new 
loans to the amount of a third of the former ones. This transaction was 
effected at the Easter fair in 1555, when the war over Siena between 
the Duke of Florence and the French under Marechal Strozzi was near- 
ing its conclusion, but a general outbreak of war with the Emperor was 

At the Easter fair in 1555 the usual market rate was 3 per cent, a 
quarter or 12 per cent a year. Money could be easily obtained for this 
rate, while 2f per cent, to 2f per cent, was often offered. The Consuls 
of the foreign 'Nations' in Lyons were then asked whether the 'Nations' 

1 Remonstrances des manhunt contre I' accord des banmiiert (Luon. Arch, municip. 
B.H. IX, 629). This is undated, but is undoubtedly of the period 1561-6. 

1 Bodin, ed. 1683, p. 893. Of. Lyon, BibL Coste MS. 6932 N. and Ebner. Archives 
Contoconent of Qeorg Ebner in Lyons. 


would grant the King a loan to the extent of a third of what he already 
owed them. He would then pay 16 per cent, on the whole, though some 
of the older debts only bore interest at 12 per cent. On 7th March an ar- 
rangement was effected on these lines. The King received a new advance 
from each creditor amounting to a third of his previous debt, and 
promised in return 4 per cent, on the whole at each fair, together with a 
sinking fund payment of 1 per cent., so that the debt would be repaid 
in 41 fairs. 1 

The precise amount of the King's floating debt at this time is not 
known, but two years earlier it had been 1 million crowns. If we as- 
sume an increase of only half a million in the years, which is certainly 
not too high, it would amount to 2 millions, or with the new third 2 
million crowns, it may possibly have been more. From the side of finan- 
cial technique the Grand Parti is interesting as being the first instance 
of a royal finance transaction with a sinking fund with compound 
interest. This innovation bears the stamp of its Italian origin, but was 
soon adopted by all arithmethicians in their textbooks and widely popu- 
larized. 2 Next it is important that on this occasion the principle of the 
public or subscription loan was first adopted in the case of a great 
monarchy. The mediaeval Monti of the Italian republics were also 
public loans, and the Florentine chronicler calls the new kind of loans 
in the French Bourse Monte since the King borrowed from any that 
would lend. This had never happened before north of the Alps, as con- 
temporaries clearly recognized. 

Kubys says: 'The King made a financial affair in Lyons which was 
called "le grand parti" because this loan was open to all kinds of persons, 
all whosoever would lend to His Majesty. They paid in their money to 
the Eeceiver General of Lyons and received in return bonds. A special 
office was created for the payment of the interest and the instalments 
of repayment, the Receveur du don Gratuit, who received the whole 
amount each fair from the Financial Administration and distributed it 
among the persons concerned. God knows how greed for these exces- 
sive gains, disguised by designation of a "free gift" (don gratuit), lured 
men on. Every one ran to invest his money in "le grand parti", the very 
servants brought their savings. Women sold their ornaments and 
widows their annuities in order to take shares in "le Grand Parti". In 
short people ran for it as if to see a fire.' 8 

Bodin speaks elsewhere of the Princes and gentlemen who invested 
money 'a la Banque de Lyons' for not only the rich Swiss gentlemen and 

1 Sources: Behaim papers in German. Museum; Ebner family archives; Haug 
ledgers in the Augsburg Museum. 
1 Michel Coquet, Livre fariOan&igue, Anvers, 1673. 
Rubys, Histoire de Lyon, p. 378. 


German and other princes took their share, but even the Pashas and 
merchants of Turkey invested under the names of their agents more than 
500,000 ecus.' 

Now we see exactly what Bodin meant by the La Banque de Lyons - 
it was the Grand Parti, or as the South Germans called it the 'Gemein- 
same Platz' in reference to the fact that the loan was open to all. It is 
also clear why the statements as to the introduction of this great inno- 
vation are so varied and inexact. What happened in 1555 was the 
amalgamation and increase of loans, some of which went back to 1551. 
The process we have described continued to widen its scope and perfect 
its organization. The Grand Parti is by no means the end of the process 
of development. This continued to gain in width rather than depth up 
to the time of the financial crisis of 1557. Other large loans were effected, 
but up to that moment there was no really important progress in the 
system itself. From this point onwards, however, a further development 
took place which renders the finances of Lyons an object of increasing 

For the year 1555 we have nothing but the receipt of Martin de 
Troyes, who had become the King's Beceiver General in Lyons, for the 
sum of 99,325 ecus, which had been advanced to the King in Lyons 
by Pietro Salviati and Company. The receipt is dated 7th October, 
1555, and refers therefore to a transaction subsequent to the Grand 
Parti. 1 

The fugitive Florentines in Lyons were at this time trying to spur 
France on to fresh efforts against Duke Cosimo of Florence, who was in 
alliance with Spain. This movement was headed by the Strozzi and the 
Altoviti. We are told that on 12th January, 1556, the Florentines lent 
the King 400,000 crowns at 16 per cent., and wished to advance a 
further 200,000 without interest on condition that the King would use 
this money against Florence. On the 27th January we are told that 
Bindo Altoviti concluded with the King's representatives a loan con- 
tract in the name of the Florentine emigres for the sum of 300,000 
crowns at 16 per cent. The matter, however, remained unsettled as the 
bonds offered were found unsatisfactory. 2 

Towards the end of August Marechal Strozzi arranged a further loan. 
The King paid over to Pope Paul IV 300,000 crowns of 'subsidies' 
through the Florentine bankers in Venice. They in their turn advanced 
120,000 crowns, while the remainder, 180,000 crowns, was taken up by 
German merchants under the names of Israel Minckel and George 
Obrecht. The terms of the loan were that it was to be repaid in two 
yearly instalments and was to bear interest at 16 per cent. It actually 
cost the King over 20 per cent., since there was a loss of 6 per cent, in 

BibL Coste, Lyon MS. No. 6933. * Brown, Calendar, VI, 314, 330. 

LYONS 305 

the two years on the exchange on Venice, and moreover the interest was 
compound. The reason why the German merchants came in was, as we 
learn from Marechal Strozzi that 'the Florentines would not bear the risk 
alone,' and the Germans were only too ready to take a part of it from 
them. 1 They were strangely optimistic about the state of the French 
provinces. There set in, at this time, a blind, senseless rush of fools who 
wanted to make money quickly - a phenomenon which has always since 
been a feature of epochs of that kind. It is probable that the Florentines 
did all they could to lure on the Germans. 

When at the end of December Michel Imhof in Lyons wrote to Paulus 
Behaim in Nuremburg that through the Welser he had been able to 
'place' 1,500 crowns for him with the King and had got a profit of 2 per 
cent, on the capital, i.e. bought at 98, Behaim was greatly pleased at 
this excellent piece of business, and Hans Imhof wrote from Antwerp 
that he had been glad to hear of it 'for the investment is safe and the 
interest good and has helped many a good fellow into the saddle.' 

The business in which Behaim was interested was what the Germans 
called the Sabs Partita (salt loan). On the 1st of November, 1556, a new 
loan was concluded, it is said, with George Obrecht, who was at the head 
of a large syndicate of Germans and Italians. The amount is put at 
900,000 crowns and the interest once more at 16 per cent. On the 16th 
December a further loan of 300,000 crowns was concluded at the same 
rate. 2 If these facts are correct, the Germans only held a third of these 
loans, for according to the Ebner list Israel Minckel, George Obrecht, 
and Company lent the King at this time only 400,000 crowns, repayable 
within 5| years in quarterly instalments and bearing interest at 4 per 
cent, per fair. The loan was secured on the revenue from the salt tax 
(Gabelle) in Nantes, Tours and Bourges. Hence the name Salz Partita. 

Though the payments of the interest and sinking fund at the subse- 
quent fairs was very slow, the faith in the public in the French Crown's 
solvency remained for a time unshakeable. At the beginning of May, 
1557, Michel Imhof wrote from Lyons that he had no anxiety on 
account of the French debt; he would be glad if the Imhof had lent the 
King in addition to their other loans half of their claim against the 
city of Antwerp. In the early fairs of 1557 money was extraordinarily 
plentiful. The market rate fell as low as 1 J per cent, per fair = 5J per 
annum. The King's Partito stood at 98-99 and at these rates there were 
people anxious to buy than to sell. The King knew well how to keep up 
this favourable temper. Eeports were spread of coming financial re- 
forms on a larger scale. When at the beginning of August, 1557, it be- 
came known that the King of Spain had ceased payment, King Henry 
assured the German merchants that they need have no fears on his 
1 Brown, VI, 904. * IMd., VI, 764, 869. 


account: he would keep his promise, he knew what was due from a 
prince's honour. Hereupon the German merchants who a few days 
earlier had lent him 200,000 crowns advanced a further 300,000 
crowns at 16 per cent. 1 

A short time afterwards the King, in conversation with a Venetian 
envoy, boasted that the Lyons merchants competed with each other in 
offers of money. They had lately lent him 600,000 crowns, of which 
100,000 was without interest. 'To tell the truth,' he added, 1 am myself 
amazed at such openhandedness in such a situation. The German 
merchants too are no less ready to serve me than the others.' The 
situation here mentioned by the King was evidently that created by his 
defeat at St. Quentin ten days before. The blind confidence of the Ger- 
man merchants might well arouse wonder - Minckel Obrecht and Com- 
pany lent, for one instance, 400,000 crowns to the King on the security 
of the Lyons customs, though these receipts were already pledged to the 
Florentines. Most curious of all, the interest on the loans was only 12 
per cent. 

Scarcely three months after malting his solemn promise the King fol- 
lowed the Spanish example and ceased payment of the interest and sink- 
ing fund on the Lyons loan, which then amounted to about 5 million 
crowns. The price then fell to 85 per cent., but nevertheless Michel 
Imhof wrote on 26th November, 'We (the Lnhof) are with thee 
(Behaim) in not wishing to sell out with loss, though things are setting 
not towards peace, but towards war. The King of France is not thus to 
be driven out and luck may soon turn again. God preserve us from loss.' 

Brown, VI, 1238, 1255. 



External Development of Antwerp and Lyons. The development of the 
two international Bourses of the sixteenth century, in spite of many 
important common traits, shows certain decided differences. Both owe 
much in the first place to their favourable geographical situation, and 
secondly to the help of their respective rulers, who pushed their develop- 
ment by the grant of large privileges. While Lyons was almost entirely 
a product of this policy, in Antwerp the national development of trade 
counted for more. Bruges had played its part and could no longer com- 
pete with Antwerp for the fruits of the great discoveries overseas. 

In the case of Lyons, on the other hand, the Geneva fairs would cer- 
tainly have continued to prosper but for the interference of the French 
Crown, and the new discoveries had relatively little importance. 

The French Kings recognized earlier than the Hapsburgs how enor- 
mously their power was increased by the possession of such a market. 
They made Lyons their financial arsenal. Accordingly Lyons had a less 
international character and was not a world Bourse of such predomi- 
nance as Antwerp. Nevertheless, Lyons also took its stamp as far as 
business was concerned from foreigners, chiefly Florentine and South 
German merchants, while in the case of Antwerp there were also, besides 
these, Spaniards, Portuguese, English, Genoese, and (though these were 
less important) merchants from Northern Germany. In both cases these 
foreigners were attracted by the practically unlimited freedom of trade 
which distinguished the world bourses of the sixteenth century from the 
mediaeval Bourses and fairs which were subject to more or less severe 

This freedom of trade resulted in the concentration in Antwerp and 
Lyons of most of the international trade of Europe and its colonies. 
Here again there is a distinction. What was concentrated in Antwerp 
was above all a trade in commodities, which was followed by a corre- 
sponding trade in bills and means of payments, which in turn produced 
trade in liquid money capital. In Lyons, on the other hand, the trade in 
bills was from the beginning the chief business, and it is probable that a 
real capital market developed from it earlier than in Antwerp. More of 
the details later: here we must first give a sketch of the process of 

We have seen what forced European princes, more especially those 
who were aiming at world power, since the close of the Middle Ages to 
resort to ever-increasing loans. This had been so for some time before 
Antwerp and Lyons became of chief importance in regard to these loans. 


In the twenties and thirties, and even to a certain extent in the forties, 
of the sixteenth century, the largest international financial transactions 
were carried out for the Emperor, at any rate, not in Antwerp, but in 
Augsburg and Genoa. Lyons attained a decisive influence in regard to 
the French Crown somewhat earlier. It is, however, striking that credit 
dealings with the Government in the case of both Bourses only became 
a regular thing and a really important branch of business from about 
1542. The years 1551-2 saw the beginning of a new and important 
phase in this development. At this time Augsburg, Genoa, and Flor- 
ence lost what had remained of their importance as centres of great 
international finance, which henceforward was entirely concentrated in 
the Capital Bourses. On both Bourses a credit boom set in which led in 
five years' time to the first large financial crisis. Another interval of 
five years brought events which led immediately to the ruin of both 

The short period of greatest prosperity in Antwerp and Lyons was the 
time when Turkish pashas invested in the French King's loans in Lyons, 
when Henry of Rantzau, the statesman and Maecenas of Holstein, 
hastened to bring his capital to Antwerp, when the total of dealings in 
money transacted in one year on the Antwerp Bourse was put as high as 
40 million ducats. We must now try to go more deeply into the real 
nature of proceedings which had such great results. 

Fairs and Bowses. The development of the international Bourses of 
the sixteenth century is only a fragment of the enormous cultural 
process which began with the dawn of any form of trade and must con- 
tinue as long as trade lasts - the process of local concentration of trade 
on the formation of markets. 

A market arises from the fact that many dealers meet at the same 
time in & given place to exchange commodities and that they compete 
with one another for this purpose. In so doing they perform a piece of 
productive work. They overcome the hindrances to trade and the 
supply of commodities arising from the fact that many goods are not 
available at the time and place where they are needed. We need not 
deal here with the causes of the latter fact, but only with the difficulties 
to be overcome in the future development of markets. 

The formation of markets has both natural and artificial hindrances 
to contend with. Natural hindrances consist first in the feebleness of 
trade itself, and secondly in the imperfection of its tools, the roads, 
transport, and the news service. Next comes the hindrance caused by 
robberies, by ceaseless wars and feuds, by the never-ending customs 
barriers of the olden times, and much else of the same kind. To this 
must be added the intentional restriction of competitors by regulations 
of the states, municipalities, religious and other confraternities, 


guilds, etc. As long as trade Las to contend step by step with such great 
difficulties, the formation of markets also must remain imperfect: to the 
greatest degree and for the longest time in the case of goods which have 
to be brought to market in order to be dealt in, while in the case of 
goods when this is not necessary a market is much more easily formed. 

The steady pressure towards trade concentration in the Middle Ages 
triumphed over these difficulties sufficiently to form yearly markets or 
fairs, i.e. markets which recurred at long intervals from one to at most 
four times a year. The extent of the trade, the condition of the roads and 
means of transport proved adequate, at any rate, in the case of many 
commodities for these markets. Trade in them also enjoyed a certain 
amount of freedom: freedom from disturbance through violence as well 
as from the influence of the measures to restrict competition imposed 
by the Church, the State, the municipalities, and others. Trade concen- 
tration in the Middle Ages was really confined to those commodities 
which had to be taken to market, i.e. to goods in the narrower sense. It 
was then only within the market itself that there were houses for buying 
and other appliances, intended not so much in the economic interest as 
in that of civil control. On the other hand, in exchange business - as we 
have seen in our introductory section - trade-concentration even in the 
Middle Ages in certain isolated instances went so far as to produce 
Bourses. Exchange business on the Bourse soon had as its appendage 
Bourse transactions in loan capital for commercial purposes. 

We cannot here enter in detail into the development from fair to 
Bourse in the case of trade in commodities properly speaking. Sufficient 
to say that the increase of trade, the improvement in communications, 
and the grant of complete trade freedom to certain markets helped to 
give a Bourse character to trade in commodities in these markets from 
the close of the Middle Ages; and the fairs gradually lost their former 
importance. Contemporaries at first regarded this as a dangerous 
anomaly; but they quickly became accustomed to it, and we soon find 
Lodovico Guicciardini calling Antwerp a 'continuous fair.' 

The development of exchange business was on rather different lines. 
It had been customary from early times to specify a fair as the term for 
all large engagements and to discharge these together with any which 
had been undertaken during the progress of the fair at its close. This 
custom came about from the same causes which produced the fairs. 
There was a shortage of ready money, which was practically unobtain- 
able except at fair times. It was difficult and dangerous to transport it. 
Cash transactions and sending ready money about were to be avoided 
as far as possible. Debits were set off against one another at the end of 
the fairs. Exchange business, more especially the money changing ren- 
dered necessary by the excessively depreciated currency and the in- 


numerable different coinages, was relieved at fair times of the burden- 
some restrictions imposed upon it at other seasons. In short, the fair in 
the Middle Ages became the usual term for all large payments; and pay- 
ment was already effected to a large extent by clearing-house methods, 
i.e. without money actually changing hands. 

This arrangement soon affected exchange business. Like other en- 
gagements Mils were for choice met at fair times. Accordingly, such 
bills as matured at fair times were always the easiest to buy and sell; 
while, conversely, bills on certain markets were easiest to get and to 
dispose of during the fair payments. 

The use of bills reduced the amount of specie payments between 
different places, just as the clearing-house system at the fairs reduced 
them at a given place. The chief intermediaries in both cases were the 

The whole system of mediaeval fair payments was a help to credit 
transactions in general and, of course, first and foremost that of the 
merchants. We have seen in the introduction how the Italians as early 
as the thirteenth century found it more profitable to draw bills on a 
large fair than to borrow. In the centuries following the bill of exchange 
became more and more an instrument of commercial credit, which by 
its means began successfully to evade the ban on usury. Indirectly, 
that is, through the agency of merchants, such operations on occasions 
even relieved the fiscal monetary needs of princes. 

It might be thought that fair-time payments, like the fairs themselves, 
must gradually have lost their importance at the end of the Middle Ages. 
The exact reverse was, however, the case. The amount of specie in cir- 
culation increased, but the need of currency increased at least in the 
same proportion. The transport of specie was still difficult and danger- 
ous, though less so than in mediaeval times. The inconvenience and risk 
of sending ready money increased with the amount sent. The restric- 
tions which the local authorities imposed on money changing and the 
penalties for any infraction of the official valuation of the currency had 
almost entirely lost their effect, but the false coining of the princes con- 
tinued briskly. The merchant class was now much more sensitive to 
these ills, but it learnt more and more how to render them harmless. 
For this end it developed money surrogates (bills and clearing-house 
payments), and created, in close connection with these, unalterable con- 
ventional fair currencies. A belated effect of the ban on usury here 
played a considerable part. The ban had, in fact, lost the greater part 
of its influence, but the merchants for long held it necessary to protect 
themselves against chicanery by giving the forbidden transactions an 
unexceptionable form. The fair bill of exchange was recognized as such 
a form, and in the sixteeneth century the theory of canon and com- 


mercial law had devised for it a strong ahield of fine-drawn justifications 
and distinctions.* Everything, however, turned on the necessity for the 
greatest possible trade concentration. While even the fairs at Antwerp 
and Lyons lost most of their importance in the sixteenth century, the 
fair payments in both markets in the first two-thirds of the century, but 
more especially in the second third, acted as clearing houses for the 
whole of Europe. 

The Antwerp and Lyons fair payments were the usual dates for the 
discharge of liabilities. It was usually very difficult to obtain large 
amounts of money capital at any other time. The transactions, however, 
which gave rise to these payments were now for the most part concluded 
outside the fairs. In this respect the development was the same as in the 
case of the trade in commodities. The more money and credit business 
increased and the more the means of communication improved - and 
here it is a question of news rather than transport - the more this trade 
could move freely to its centres even apart from fair times, the more 
continuous did it become and the more did it assume the character of 
Bourse business. We shall see later exactly what we understand by 
this. Here we must deal with the external form given to capital transac- 
tions by all the influences we have mentioned in the world Bourses of 
the sixteenth century. 

The Forms of Commercial Capital Transactions. We have dealt fully 
with these forms in the two preceding chapters. We know that two 
forms were principally used as a modest disguise for the loan at interest. 
These were the Eicorsa bill and the Deposition. 

The Eicorsa bill, originally Eecambium, a transaction which was only 
intended to allow recourse on the drawer of the bill by the holder in case 
of default, was certainly not much used before the sixteenth century as 
a cloak for loans. This was done at first chiefly in the way which we 
come to know in the case of Antwerp from the Eeport of the Paris jurists 
in 1530, and in the case of Lyons from Davanzati's description. This 
'Eicorsa bill in two Acts' was not only a credit instrument, but also con- 
tained a strongly speculative element, as no one could foresee the ex- 
change rate at the time of the re-exchange. Accordingly, there was a 
possibility of making a profit, not only on the interest, but on the differ- 
ence in the exchange rate. This element was only got rid of when later 
the two acts of the Eicorsa bill were amalgamated in the Genoese bill 
fairs. The same result was meanwhile attained by the second form em- 
ployed in the commercial credit business of the two world bourses, the 
Bourse deposit. 

The Bourse deposit was at bottom nothing other than the loan from 

Cf. e.g. Endemann, Studien, I, 157 ff., 278 fi. 


fair to fair, which must have been fairly frequent even in the Middle 
Ages. Its name 'deposition' arose in the sixteenth century from the 
necessity of justifying from the ecclesiastical point of view an indispens- 
able kind of business. It was indispensable because of the rapid exten- 
sion of capital transactions in the two world bourses. Hence it came 
about that Charles V in 1540 imposed a tax on interest in the case of 
transactions of this kind, and by tikis act the authority of the state made 
a wide breach in the wall of the mediaeval ban on usury. 

The Bourse deposit took the form either of a bill or - in the Nether- 
lands - of a bearer bond, which for this purpose in 1537 was subject to 
the same rigid rules as to form which characterized the bill. Both these 
forms were only two different varieties of the fair bill, which, as we have 
seen, owed its economic importance to the fact that it provided a form 
to commercial credit to which exception could not be taken. 

The Importance of the World Bowses for Public Credit. The world 
Bourses of the sixteenth century, on the one hand, made it easy for the 
South German and Italian merchants to turn their attention to finance 
business, and, on the other hand, they helped princes to raise large loans 
at interest. The process here carried out was a special case of the forma- 
tion of markets. 

In the first decades of the sixteenth century large financial dealings 
were still chiefly transacted in Augsburg, Genoa, and Florence, where the 
business houses, with the most important money capital at their dis- 
posal, had their head-quarters. They were concluded after negotiations 
with individual firms, without direct competition of one house with 
another: thus not in the characteristic market manner. The payments 
resulting from such engagements were, for the most part, made in 
Lyons or Antwerp, where the whole world in any case had either to 
make or to receive payment. 

Even in this period, however, it happened on occasion that merchants 
in Lyons or Antwerp lent to princes because they had money over after 
a fair payment and took the opportunity of profitably employing it till 
the next fair with a financial official who might be at the fair. But there 
was as yet no regular Bourse business of this kind. The same holds good 
of the occasional loans which the princes in the case of a specially press- 
ing call for money had raised in Lyons and Antwerp. These loans were 
more or less compulsory, and were secured by three or four different 
interlocking guarantees, and the pawning of the Crown jewels and what 
not. It needed the influence of the most distinguished statesmen as well 
as threats of every kind before they at last came painfully into being. 
Loans such as these were not really Bourse loans - a fact proved by the 
violent and frequent fluctuations in their rate of interest. 

The twenties and thirties of the sixteenth century saw a gradual 


change, due to the fact that the Florentines settled in Lyons, and certain 
South Germans, like Hans Kleberg and Lazarus Tucher, learnt how to 
meet the monetary requirements of the powers struggling for the first 
place in the world. The years 1542-3 and 1551-2 were critical in this 
process of development. 

For once we can time an important stage in economic development 
exactly because political forces here came into play to an even greater 
extent than economics; and political effects tend to be catastrophic, as 
opposed to the slow, almost imperceptible action of economic forces and 
interests. The first impulse to the market formation we are here con- 
sidering did not count from the side of supply, from capital seeking 
investment, but from demand, the princes and their need of money. 
We see this in the case of Lyons from the fact that Francis I himself, 
after 1542, several times had to resort to indirect measures of confisca- 
tion in order to raise loans. The war between Charles V and Francis I, 
which began in 1542, demanded armaments on a scale never before seen. 
The French King put two armies in the field, and one of these was said 
to be eighty to a hundred thousand strong. These were not Swiss and 
Germans alone, but Swedish and Danish mercenaries also; for Francis 
had made alliances with the Kings of Denmark and Sweden. He had 
also allied himself with tibe Turks and so had forced the Hapsburg 
brothers on their side to raise several large armies. On sea, too, large 
forces were raised on both sides. King Henry VTII of England also pre- 
pared for war, and all Europe bristled with arms. 

This all required money on such a scale that the princes finally gave 
up the last shred of their dislike of floating loans bearing interest, which 
now became a regular means of covering extraordinary expenditure and 
were soon used for ordinary current expenses as well. Loans both so 
frequent and so large could not be raised either compulsorily from the 
princes' subjects nor yet voluntarily with the different business houses 
who had hitherto helped them out of their difficulties. In this extremity 
two men first and foremost recognized the proper method: Gaspar Ducci 
in Antwerp, and the Cardinal de Tournon in Lyons. They had recourse, 
not to separate merchants, but to the Bourses. 

Meanwhile, the supply of money capital in both markets had greatly 
increased in consequence of the large changes in world trade, which we 
already know. Many South German and Italian merchants had settled 
permanently in Antwerp and Lyons, where they greatly helped in bring- 
ing in their countrymen into financial dealings which promised much 
profit and appeared safe. The same thing was done by the Antwerp and 
Lyons agents of the great business houses, which let themselves be 
carried away only too easily, till at last the agents had it all their own 
way and the factories in the two world Bourses were converted into 


head offices. The trading companies now attracted from every side the 
free money capital of the small holders of capital, and for these they paid 
a much lower rate than what they were able to get in financial dealings. 
On the Bourses themselves the great financiers borrowed more and 
more outside capital, which could not else have found employment and 
was therefore relatively cheap. 

The supply of money capital in liquid form was more and more 
concentrated in Lyons and Antwerp, and the princes and their financial 
advisers were not slow to profit by this. In France, especially, this was 
cleverly done. It was published abroad that anyone taking up the 
King's loans would get far higher interest than could be had otherwise 
in Lyons on bills or deposits. This meant the beginning of the Public 
Subscription Loan, a system which underwent important developments 
in Lyons. The South German and Italian financiers here again took an 
active part. 

In Antwerp also a subscription loan was opened as early as 1542. It 
was, however, without interest and was only an occasion for the display 
of loyalty in face of the threatened invasion by the French. In Antwerp 
it did not become a system. Even Ducci, who then played the chief part 
in financial dealings in Antwerp, had to pay a rate far in excess of the 
market rate in the case of the large loans he raised for the Emperor and 
the Netherlands Government. It was, however, lower than it had been 
before -a sure sign that the supply of capital was increasing more 
quickly than the demand. This impression is strengthened when we 
consider that the city of Antwerp and the King of Portugal at this time 
were making demands on the money market much greater than ever 
before, and that the English Crown was now beginning for the first time 
to borrow largely in Antwerp. 

Gaspar Ducci attained his end chiefly by the issue of great masses of 
the bonds of the Receivers General. The causes of the favour now ex- 
tended by the Antwerp Bourse to a class of investment which it had 
before regarded with justifiable suspicion must be the subject of our 
investigation later. We cannot discover Ducci's methods in detail; we 
may, however, be sure that his intention of selling such bonds was 
always known on the Antwerp Bourse generally and at once, and that he 
used many artifices, not always of a desirable kind, to increase the 
success of these issues. At any rate, the business in bonds of the Re- 
ceivers General was done through the market; the demand was directly 

The ambition to share in the Antwerp and Lyons financial dealings 
affected an ever-widening circle, until finally even the most violent in- 
crease of the demand did not exhaust the supply, and whole classes of 
the European peoples were seized by a regular mania or craze for the 


possession of these magic parchments known on the world Bourses as 
King's Bonds, Court Bonds, or Bonds of the Receivers General. 

The last great war which Charles V had waged against France and 
her allies from 1552 onwards, and which Philip had to continue after his 
father's abdication, made claims on the Bourse which hitherto would 
have been regarded as unthinkable. The system of employing mercen- 
aries now reached its highest point, as may be seen from the fact that 
from 1552 onwards there were standing regiments of Swiss in the service 
of the French Crown. 1 

In 1552 Gaspar Schetz in Antwerp was appointed by the Brussels 
Court as the first financial agent proper; and at the same time Thomas 
Gresham appeared as the representative of the English Government in 
their financial dealings on the English Bourse. This marks a further 
stage in the process of development. The princes, when they wished to 
raise large loans in Lyons or Antwerp, at first used to send their highest 
finance officers; later they more and more frequently made use of the 
agency of the merchants resident at the Bourse centres and of brokers. 
At the beginning they conferred on these agents only titles and honours, 
a sort of semi-official position; now they gave them out and out an 
official position, while in Lyons the Governor-General, the King's Gover- 
nor, acted as his chief financial agent. 

So we find at the close of the development, on the one hand, official 
representatives of the most powerful European monarchs permanently 
accredited to the world Bourses; and, on the other hand, we note that 
the Antwerp and Lyons agents of the great financiers are the real 
leaders. It would be hard to conceive a more striking proof of the 
irresistible influence of the market. 

The Commonalty of the Bourse and Bourse Opinion. The complete free- 
dom enjoyed by trade in Antwerp and Lyons in the sixteenth century 
was far the most powerful incentive to business concentration, more 
important than the improvement in communications, which began to 
take the lead in this direction in the nineteenth century. Freedom to 
trade took away most of their meaning from the mediaeval privileges of 
isolated foreign 'nations' and welded the members of those nations who 
crowded into the centres of international business into a merchant class, 
more or less homogeneous both as to its rights and its duties. It was this 
liberty, in the first place, which made business on commission possible, 
and so enormously extended the numbers of those who could share in 
the advantages of the market. Finally, it was this that destroyed the 
rigid mediaval organization of local trade and created the modern 
Bourse. On this last process we must concentrate our attention, restrict- 
ing ourselves in the main to dealings in capital. 

Max Jahns, Heeresverfaanmeen vnd VSlkerkben, 2nd ed. (1886), p. 266 fi. 


The mediaeval Bourses, as we have seen in our introduction, were 
local assemblies of merchants mainly for the purpose of dealing in bills 
of exchange and loans of capital for commerce. The transaction of this 
business was the common object which brought together merchants of 
different kinds who otherwise would have had nothing in common. 
The Bourse enabled these different dealers to deal directly with one 
another in buying and selling bills and loans of commercial capital. 

In the Middle Ages the Italians had control of business of this sort, as 
they were the only people who dealt in these on a sufficient scale to form 
a market. Accordingly, mediaeval Bourses were permanent assemblies 
of Italian merchants, which members of other nations only took part in 
when they had to do business in bills or capital on loan. Generally 
speaking, they remained in their houses or warehouses or their own 
special assemblies, in which Bourse business proper either did not exist 
or only came about on occasions. 

This was the state of things about 1500 even in Bruges, the city which 
in the Middle Ages was the strangers' town par excellence. The different 
nations were then held apart by jealously guarded special privileges and 
by the vested interests of the natives, who reserved for themselves 
certain agency services (innkeeping, brokerage, etc), even if they did 
not, as was the custom everywhere else in the Middle Ages, entirely pro- 
hibit dealings of the 'visitors' amongst themselves. 

Meanwhile, Antwerp created a Bourse for the merchants 'of all 
nations,' abolished all restrictions on their trade, brought them into 
immediate daily communication, and created what the Paris jurists in 
their memorandum of 1530 called the 'Bourse commonalty,' i.e. an as- 
sembly of business men of different nations for a common purpose, the 
transaction of business of a given kind, an assembly whose members 
accordingly had certain interests in common with one another. As to 
the kind of business which formed the common end, it is sufficient to 
say here that dealing in exchange remained the chief business of the 

Within the Bourse there was formed what we call the feeling of the 
Bourse, i.e. a common public opinion as to certain important elements 
of Bourse business formed from the subjective views of the different 
habitues of the Bourse from their immediate contact with one another, 
a feeling which soon came to be a most powerful influence in determin- 
ing these elements. 

These are the credit of those admitted to the Bourse, and the quality 
and price of the commodities dealt in. Dealing not organized as a 
market knows no public opinion on such matters. Every buyer or seller 
is forced to form his independent judgment. He has, of course, certain 
clues for his guidance in other similar transactions or in other individual 


views which he has noticed had been held by others before on such 
points. He does not, however, know what these are at the moment of 
the transaction; and in view of the great difficulty of forming a correct 
judgment on such subjects, this is what is finally decisive, especially for 
trade whose essence is that its operations must be quickly carried out. 

Every market creates a market opinion. Among the traders who visit 
the market a general view grows up as to certain important elements 
of the business of the market, and this market opinion immediately 
acquires an independent meaning for the purpose of this business. In 
the case where the market is not yet full-fledged, as in the mediaeval 
type of fair, the significance of the market opinion is only imperfectly 
developed, first because those who form it are few in number and then 
because, generally speaking, it can only come about two or three times a 
year. Conditions are quite different in the daily business of the Bourse. 
The opinion of the market or the Bourse here becomes a factor of the 
first importance. 

It seems fitting here to discuss the influence of the Bourses on the 
development of the international news service. 1 

Long before diplomacy had sufficiently perfected its system to get the 
necessary political news on its own, an abundance of political and other 
news reached the centres of trade. From early times the merchant, in 
order to ply his trade, had had to have accurate information as to cur- 
rent events which largely determined such things as the safety of the 
roads, the course of commodity prices and the credit-worthiness of other 
merchants. The merchants' letters of the earlier period, therefore, regu- 
larly contained news of this kind often in great detail. These were the 
first 'newsletters,' which at a later time were composed by professionals 
and soon were printed - a development which began about the end of 
the sixteenth century. 

In the mediaeval fairs news of all kinds came in with the merchants 
themselves, and passing from one to the other formed the real basis of 
public opinion. Where a daily Bourse developed, the news service also 
became permanent. Already during the Middle Ages the best informa- 
tion as to the course of events in the world was regularly to be obtained 
in the fairs and the Bourses. 

This statement applies in a far higher degree to the world Bourses of 
the sixteenth century. In order to see this we need only look at the 
dispatches of the Venetian envoys collected in the Diaries of Marino 
Sanuto or the reports of the English diplomatic agents, to notice how 
much of their news originated either directly or indirectly from Antwerp 

* Of. Ehrenberg, 'Gesohriebene Hamburger Zeitnngen im 16 Jahrhundert' in 
Mitih. d. VereiJff. Hambg. Geschichte.&L VI,Heft 1, No. 8. See daoDialogues 
Flamen-Frantoys, recueUliz par Gerard de Viyre, Rotterdam, 1607. 


or Lyons. It is astonishing how much at that time diplomacy was in- 
debted to trade for its news service. We have already referred to the 
fact that it was Thomas Gresham's close and important connection with 
the Antwerp Bourse which caused Queen Elizabeth and her statesmen 
regularly to be better informed than any other Government of the 
time as to everything that happened in Europe. 
It will be evident without more comment that a news service of this 

Bourse opinion in the world bourses. 

We must now enter in detail into the meaning of this Bourse opinion 
in so far as is necessary for our own particular purpose. In so doing we 
disregard altogether the large question of speculation in commodities 
and its importance for the Bourse business of the sixteenth century and 
must once again limit ourselves as we have done before to the traffic 
in bills and loan capital. 

Bourse Opinion and Commercial Credit Transactions. The Ditto, di 
Sorsa. In the case of individual isolated credit transactions, that is, in 
those not effected through a market, every person who gives credit has 
to form an independent judgment as to the credit-worthiness of the 
person to whom he gives it. This is always an extremely difficult task, 
and it becomes quite impossible when the persons concerned live in dis- 
tant places only to be reached with enormous difficulty when means of 
communication were bad. On this account, therefore, the mediaeval 
fairs served international credit business as a device for measuring 
solvency. At the beginning of the fourteenth century the Florentine 
merchant Balduci Pegolotti says of the Champagne fairs: 'Anyone who 
fails to meet his engagements at the fair settling days is held for bank- 
rupt. He completely loses his credit and cannot show his face at the 
fairs.' 1 This system for assessing solvency had, however, the important 
defect that it acted both too seldom and too late. The Bourse remedied 
the defect in so far as that was possible. The Antwerp Continues codi- 
fied customary laws, contain regulations as to persons who are 'called 
insolvent by public report on the Bourse.'* This, however, was only a 
negative criterion, the economic importance of which cannot be rated 
very high. The Bourse, on the other hand, was most important for com- 
mercial credit transactions because Bourse opinion furnished com- 
mercial credit with the idea of the good solvent Bourse firm, or Ditta di 
Borsa, as a positive permanent conception which could be turned to 
account in business. 

The Romanic commercial language of the Middle Ages designated 

Pignini, Delia Decima e deBe altre gravezze, etc., TV, 239. 
1 'By openbaren ghernohte ter borsse voor insolvent befaemt,' in Coutumes, fates 
Impresnae, v. 1582 (Coutumes d'Anvers ed. Long<, II, 412). 


ditto (dica, dicta from dicere) a commercial promise to pay a guarantee 
or security, and also the document containing such an engagement or 
the signature or trademark which made it valid in law. More especially 
the security given by the Eomanic above all the Italian exchange 
dealers and bankers for the engagements of their deposit clients was 
called by this name. As this security was effected by book entry, by 
transfer in the bankers' books from one account to another, book entry 
also bore the same name. The modern Italian meaning of the word in 
the sense of a business firm appears to have arisen in the sixteenth 
century, and this is certainly true of the specific meaning which is in 
question here. The South German business correspondents of the six- 
teenth century use the word 'ditta' very frequently in the sense of a 
commercial borrower in bills or deposit business on the Bourse, and they 
use the expression 'Buone ditte' when they wish to designate these 
borrowers as credit worthy. Finally, the term 'Ditte di Borsa' is used 
to mean those borrowers who are generally accounted solvent on the 

The Bourse opinion of the international Bourses of the sixteenth 
century held as 'good' beyond all doubt a large number of business 
houses of different nationalities, whose representatives did business on 
the Bourse every day and borrowed largely. In this way individual 
lenders were spared the difficult task of examining the credit-worthiness 
of these houses, if they gave them credit. It is obvious that this greatly 
facilitated the development on the Bourse of a regular large business in 
bills and commercial loan capital. For in this business the fact that 
credit-worthiness had been established acted as an authoritative deci- 
sion as to the quality of the object dealt in. From now onwards there 
was a large mass of commercial claims all similar in quality standard- 
ized, and these formed the object of a regular Bourse business. As the 
credit-worthiness of a sufficient number of Bourse firms had been con- 
sidered as above suspicion (even if this was not so in actual fact), the 
parties, disregarding the difficult question of quality, could concentrate 
on settling the prices of bills and loan capital, and these prices could 
become real Bourse prices. 

Bourse Opinion and Public Credit. What we have just said of com- 
mercial credit holds good also of public credit. In this case also Bourse 
opinion had the effect of levelling or standardizing the differences of 
quality between the different debts. Here, however, there were certain 
deviations due to the special nature of public credit in early times. 

As we have seen, most princes in the 'Age of the Fugger' had origin- 
ally very little personal credit. Accordingly, the quality of a debt owed 
by a prince was not determined, in the first place, by the credit-worthi- 
ness of the debtor, but by the kind of security which he offered the 


creditor, i.e. the nature of the guarantee or the pledged revenues. This 
quality was extremely various in the different debts. 

The real value of the engagements of the same prince varied in accord- 
ance with the amount of authority the creditor was given in regard to 
the pledged revenues, and also with the nature of the revenues with 
reference to the time and place where they were collected and the will- 
ingness and capacity to pay on the part of those liable to taxation. It 
varied also with the result of the harvest and also with the political and 
other general conditions of the country whose prince was borrowing. In 
the same way, when it was a case of a claim secured by a guarantee, 
this depended on the personal qualities and credit-worthiness of the 
guarantor, whether the surety was one or another of the high nobility, 
the Diets or the different cities. 

The position was complicated when there were various guarantors, 
whose mutual liabilities were not clearly defined. Even the forms of the 
notes of hand, the signatures and seals which they bore, particular 
phrases in the text and the like were regarded - whether rightly or not - 
as bearing on the real value of the claims, and were often in consequence 
the subject of long negotiations between the debtor and the creditor. 
This leaves out the times when the princely debtor was old or ill and 
people feared that his debts would not be recognized by his successor. 

It needs no further proof that in view of such disparities in the quality 
of debts contracted by princes it was only by exception that there could 
be any question of Bourse loans, and that generally the loans were not 
raised through the market, but concluded with individual business 
houses. Yet it was exceedingly difficult for a single firm to judge of the 
quality of the security offered. Even the largest Italian or South Ger- 
man Company was unable to find out with certainty the true value of 
the security offered; for example, on Spanish revenues, even if they had 
permanent representatives in Spain and were kept in close touch with 
Spanish conditions, even if they chose their chief agent in Spain with 
the greatest care and gave him very wide powers, yet the final decision 
had to be made in Italy or South Germany. The true value of a claim 
on Spanish revenues had to be assessed in Genoa or Augsburg. This 
was impossible, and had it been possible the effect would have been only 
momentary. How could Genoa or Augsburg know whether the King of 
Spain would not one day see himself compelled by unforeseen circum- 
stances to repudiate the claim? 

While on the one hand the dissimilarity of the different princely loans 
tended to keep princes' loans in the stage of isolated transactions out- 
side the market, this was in the long run impossible because the task of 
estimating the real value of the different loans was too much even for 
the largest isolated firms. 


This situation tended steadily to standardize the business in royal 
loans and to concentrate it on the Bourse, a development which we can 
follow in sufficient detail in the case of Antwerp and Lyons. 

In Antwerp it is most clearly shown in the ever-growing popularity of 
the bonds of the Receivers General As we know, these were private 
obligations issued by the Receivers General on Government account. 
Since the Government gave no special security, the quality of the bonds 
was entirely determined by the capacity to pay of the Receivers 
General, i.e. of officials who had all been merchants originally and who 
continued to be regarded as such on the Antwerp Bourse. They were 
treated on the Bourse as Ditte di Borsa, and it was the opinion of the 
Bourse as to their capacity to pay which determined the value of the 

It is necessary, however, to distinguish different stages in this de- 
velopment. In the earlier period, i.e. up to about 1542, the opinion of 
the Bourse was unfavourable to the bonds of the Receivers General. It 
had not yet become habitual to judge their quality merely with regard 
to the commercial capacity to pay of those who issued them. There was 
a demand for notes of hand of the feudal lord, and if possible a special 
additional pledge. The liability of the Receivers was not yet regarded 
as a sufficient substitute for other security. After 1542, however, Gaspar 
Ducci began to raise very large amounts on the Antwerp Bourse on 
bonds of the Receivers General alone, a sure sign that Bourse opinion 
had changed in regard to these issues. If we ask what had caused this 
change of front there can only be one answer, namely, that Ducci man- 
aged to convince Bourse opinion that the Receivers General were Ditte 
di Borsa, and the bonds of the Receivers General became in consequence 
completely standardized or fungible, were regarded by Bourse opinion 
as engagements of an even quality, which could be bought by the public 
without special investigation in each case. 

Bourse opinion was not wrong in holding that the quality of the 
bonds of the Receivers General was alike in each case, its mistake was 
merely in regard to the quality itself. The Receivers General were com- 
pletely unable to discharge the enormous liabilities they undertook. 
The quality of the bonds was not good, but very bad. 

This, however, did not become evident till the great financial crisis of 
1557. Until then the bonds of the Receivers General had borne the 
chief part in the enormous movement of capital concentrated in Ant- 
werp, and they owed their importance in the last resort to the fact that 
they were perfectly standardized (fungible). It was this which made it 
possible to form Bourse opinion as to the quality of the bonds, and so 
facilitated the growth of a regular Bourse business. 

In the case of other loans of princes and cities in Antwerp - as, for 


example, in the 'Court Bonds,' the obligations of the English Crown, the 
Portuguese Crown, the city of Antwerp, etc. - we can point to the same 
development, though we cannot refer it to its causes with equal cer- 
tainty. We only note the fact that here also Bourse opinion acted more 
and more as the factor which determined quality, and that the indi- 
vidual capitalists were obviously for the most part led better in their 
views and in their action by the opinion of the Bourse and that few 
among them were able to escape its influence. 

The development in Lyons was analogous. The capitalists who lent 
their money to the French Crown through the agency of the Lyons 
Bourse, from about 1542 onwards, ceased on account of the high rate of 
interest to attach any special consequence to securing their claim by a 
special pledge. This was, in fact, usually granted even at a later date; 
but from 1550, at any rate, the King's bonds were regarded on the 
Lyons Bourse as an investment of more or less even quality throughout, 
and the amalgamation of the different Bourse loans into one known as 
Le Grand Parti was an important step in the process of standardization. 

After this the special pledge, if any, was scarcely taken into considera- 
tion by Bourse in assessing the value of the loan. This depended rather 
on general considerations, the material for which was taken from the 
news service concentrated in the Bourse. This, however, brings us to a 
fresh subject which we cannot treat at present. 

Bourse Quotations and Bourse Bate of Interest. 'The price at which the 
merchants deal in bills they call the Bourse price, for no man ascribes 
its establishment to himself, but to the commonalty of the Bourse, i.e. 
the commonalty of the place where the merchants assemble.' In this 
way the Paris law faculty in the year 1530 rightly defines the function 
of the Bourse in settling prices in bill transactions. This settlement of 
the price had already acquired a Bourse character in many markets in 
the Middle Ages; but even in Bruges the Italians still controlled the 
transactions of the exchange Bourse, which was merely the daily Bourse 
assembly of the Italian merchants. Subjects of other nations usually 
had to apply to them, if they wished to buy or sell bills. 

We know how the change came about in Antwerp and Lyons, and 
that the Italians lost their monopoly. Exchange dealing in both mar- 
kets now assumed the character of world Bourse business, that is to say, 
the supply and demand of international exchange dealing was concen- 
trated there on such a large scale that daily direct mass transactions 
were now possible between the subjects of the different nations. 

At the same time, the standardization of commercial credit made such 
strides that in normal times there were enough Ditte di Borsa - that is, 
enough Bourse firms regarded as solvent beyond question -to make 
possible large daily transactions in bills which were considered as being 


all alike of good quality and which therefore needed no further ex- 

The manner of making the price each day was built up on this basis. 
An accurate description is given of this also in the Paris memorandum, 
evidently from information supplied by an Antwerp merchant: 'The 
broker who has been commissioned by a merchant to buy a bill on 
Spain seeks out on the Bourse one of those "rich and powerful mer- 
chants" who no longer deal in "commodities, but in money and exchange. 
The broker then asks him whether he will draw a bill, and if so on what 
terms? He in his turn answers by asking "What is the Bourse price?" 
If he is content with the price the broker names, the business comes to 

The process was, of course, often different from the one described. 
The crucial point is that the making of the price is no longer an indi- 
vidual act, but is controlled by the opinion of the Bourse. The price 
which Bourse opinion settled as the right price, either once a day or 
under certain circumstances several times a day, for the bills of a certain 
kind issued by solvent Bourse firms, this price is the Bourse price for 
that kind of bill. It is noted in the business letters and the price bulle- 
tin. The smaller Bourses followed its lead, and it became the basis for 
exchange dealing between the different markets. 

As a matter of fact, transactions were often concluded on the Bourse 
at rates more or less widely divergent from the general Bourse prices. 
These cases, however, were determined by special circumstances, such 
as extra risk, inexperience of one of the parties, clumsiness on the part 
of the broker, and so on. Transactions of this sort were more or less 
individual prices made in the Bourse business, but even they could not 
entirely escape the influence of the Bourse price for the standard type of 
the kind of bill in question. 

The 'Conto,' the official list of quotations which was settled in Lyons 
during each fair pay day, was at bottom merely the officially attested 
result of an inquiry undertaken four times yearly under the supervision 
of the authorities as to Bourse opinion in regards to the price of bills. 
The importance of the 'Conto' was, as we have explained in an earlier 
chapter, chiefly legal, but the Bourse price itself was an economic 
phenomenon of the first order, to which we must give a special discus- 
sion later. 

The Bourse rate of interest was arrived at in the same way as the 
Bourse quotations for bills. In this case also we have to do with a 
phenomenon the beginnings of which stretch back a long way into the 
Middle Ages. We have shown in the introduction that in the thirteenth 
century, in the Champagne fairs, there must have been a sort of market 
rate of interest; and that the Italians, in the fifteenth century at any 


rate, had learnt empirically the rules which, produced ebb and flood in 
the capital markets. This knowledge became common property of the 
European merchant class as a whole in the sixteenth century with the 
growth of the practice of borrowing and lending money capital in the 
market. The standardization of commercial credit here had the same 
effect as in exchange dealing. In Antwerp and Lyons there arose a 
Bourse rate of interest for loans of solvent firms from fair to fair, and 
this rate was sanctioned by the secular authority in the Netherlands 
with the filing of a maximum of 12 per cent.; and it used the trans- 
parent veil of the 'Depositum' as a protection against ecclesiastical 
attacks. As the interest payable at the time on Bourse deposits was also 
notified abroad in the Bulletin of Bourse quotations, the parallel with 
the exchange quotations is perfect. 

The Bourse rate of interest applied only to the Ditte di Borsa; other 
debtors paid higher rates. This is true especially of Bourse loans to 
princes, the rate of which regularly was far in excess of the Bourse rate. 
This was, however, rather apparent than real. The rate itself was not 
higher, but only the insurance against risk. For a long time the fluctua- 
tions here were very wide. In the case of these loans, even on the 
Bourses, the price was made as an isolated instance. It was only from 
1542 onwards that it assumed a Bourse character, and thenceforward 
the rate for the princely loans on the Bourse was fairly parallel with the 
ordinary Bourse rate. For every kind of princely or other public loan 
(Bonds of the Receivers General, Court Bonds, Obligations of the Eng- 
lish Crown, etc.) Bourse opinion fixed a rate of insurance against risk 
which depended on the view taken of the quality of the kind of loan. 
The amount of this premium varied only within bearable limits. 

On the other hand, another movement set in which appears to be 
exactly contrary, but which in the last resort is to be referred back to 
the same causes. There began to be fluctuations in the capital value of 
the princely debts already in circulation. 

This phenomenon had its roots far back in the Middle Ages. The 
shares in the early Italian Monti had been subject to fluctuations in price. 
In the case of the world Bourses of the sixteenth century we are able to 
give, at any rate an approximate, date for the first scarcely noticeable 
beginnings of the price fluctuations which have since characterized 
Bourse business. We saw that in the Lyons Bourse in 1530 the 'King's 
Bonds' were sold at a slight discount of between J and 1J per cent., 
which increased in the next few years to a discount of between 4-6 per 
cent. After the State bankruptcy of 1557, this grew to 15 per cent., and 
then increased still further. We cannot follow out this development in 
the case of Antwerp, though we know that here too at a later time bonds 
of the Receivers (Jeneral could only be sold at a heavy sacrifice. The 


fact, which no one disputes, that it was the fluctuations in price which 
first brought about regular Bourse business in the already existing 
Bong's Bonds, may at first sight appear astonishing. People might be 
inclined to think that claims regarded as possibly doubtful would be 
less dealt in than those which Bourse opinion held as sound. A closer 
consideration soon shows the reason of this phenomenon. 

While the credit of the French Grown was regarded as unimpeachable, 
the original creditors who had the 'King's Bonds' on account of their 
high rate of interest held them as long as possible; and persons anxious 
to invest in these securities had accordingly to apply to the agents of 
the French finance administration and take over new bonds at par. In 
the year 1550 many well-informed creditors of the Crown did not regard 
its credit as entirely unassailable, and accordingly sought to dispose of 
their holdings, if not at the face value, then at a small discount. This 
is the germ of the 'Baisse' tendency of our present Stock Exchanges. 
This discount, on the other hand, produced a widespread inclination to 
buy 'King's Bonds,' and thus calledinto being a 'Hausse' tendency (rising 
market). The struggle between these two opposing tendencies gave rise 
to the Bourse opinion as to market value of the 'King's Bonds,' that is, 
their Bourse price. This was reported by the habitues of the Bourse to 
their foreign business associates, who were also holders, but the official 
Bourse bulletin did not publish it till long after. 

Speculation and Arbitrage in Capital Transactions. Bourse prices and 
Bourse rates of interest are, as we now know, the product of Bourse 
opinion. What, then, is Bourse opinion? The expression 'opinion' might 
easily produce misconceptions, especially since we have heard that 
Bourse opinion is bound to investigate the quality and also to fix the 
price of certain offers of capital on loans, bills, etc., and that in this task 
it based itself on the news service concentrated in the Bourse. Hence, 
involuntarily we may come to think that the question here is one of 
competition in ascertaining the truth, the 'true price,' or the like. The 
canonical doctrine of usury had been strongly influenced by such 
views, e.g. in its judgment on the fair bill. Even at present such ideas 
are not yet completely dispelled, though they are, of course, quite 

Bourse opinion is not like perhaps, for instance, scientific opinion, 
meant to serve truth, but to serve trade. The Bourse habitues want to 
make money. That is their private economic aim. In order to carry out 
their private purpose they form a market and so discharge a public 
economic duty. The market would not be formed if the habitue^ did 
not want to make money. The wish to make money is the indispensable 
condition for the performance of the special tasks performed by Bourse 
opinion, the settlement of Bourse prices, and so on. The performance of 


a service necessary in the interests of public economy is not necessarily 
dependent on the attainment of the individual's private aim, or vice 
versa. Experience seems rather to show the contrary. It is an impor- 
tant consequence of our economic system which everywhere hands over 
economic -that is, social - functions to the egoism of the individual 
guided by his own intelligence, because in this case both the common 
feeling of the community and a mechanism guided by pure compulsion 
are inadequate. 

The money-making instinct which Bourse opinion is formed to serve 
is guided by intellect. The Bourse habitues try before concluding their 
transactions to get clear as to all the points telling for or against the 
attainment of their business objective. Such points are, however, only 
to a very small extent of such a nature as to allow conclusions to be 
drawn which are both sure and instantly realizable. For the most part 
they are only of a kind to produce guesses, opinions on which the Bourse 
opinion bases itself. This, again, is a necessary consequence of our whole 
economic system. The more it rests on exchange of commodities, the 
more its uncertainty increases; for on this account the individual is in 
conduct of his business dependent on other individuals, often at a great 
distance, and on foreign markets; and he is obliged ever increasingly to 
bring the future into the circle of his calculations. 

Here we reach the point where we can look back on our concrete con- 
ditions and can link up with what we have said as to the difficulties 
experienced by individual lenders in credit transactions carried on out- 
side a market in ascertaining the quality of princes' acknowledgments of 

The change which came about when Bourse opinion took over the 
business of valuing quality, was not that these difficulties decreased but 
that the whole process was completely revolutionized. Bourse opinion, 
generally speaking, no longer troubled much about the special securities 
which had given the individual lenders so much anxious thought. What 
it considered important was the debtor's general capacity to pay and 
good will, rightly judging that in the last resort these points were 
decisive in the case of credit to be given to princes. Bourse opinion 
could not act otherwise; for the news which reached the Bourses in great 
quantity was not of a kind to render easier any special judgment as to 
the security of individual princely notes of hand, but rather to help a 
general judgment as to the political and economic situation or the 
financial condition of princes. Bourse opinion was a better judge of 
these general conditions than the individual business house, and this is 
specially so in the case of the conclusions to be drawn as to the future. 
The Bourses of Antwerp and Lyons foresaw in time the impending 
crisis of 1557, but this did not prevent the South German merchants 


from lending right up to the bitter end enormous amounts of capital to 
the Kings of France and Spain who had long been really bankrupt. 

We must here discuss parenthetically the expression which the six- 
teenth century used for the business which aims at the systematic ex- 
ploitation of future events, especially future prices. We call this 'specu- 
lation,' but in the sixteenth century this idea was confused with that of 
'arbitrage,' i.e. the business based on the exploitation of present price 
differences between different Bourses. In fact these two ideas could not 
be kept entirely distinct, for an arbitrage must be speculation if it aims 
at making a profit on rapidly changing differences of price between 
centres such as Antwerp and Lyons, when it took a month to get an 
answer back from one to the other. Peri therefore is quite right when, 
in 1640, he speaks as follows about 'arbitrio.' Profit, he says, is the aim 
to all trade. The activity directed to this end is subject to chance, which 
mocks at every calculation. Yet there is still ample space for reasonable 
calculation in which the possibility of adverse fortunes is never left out 
of account. This mental activity engaged in the service of business is 
called 'arbitrio, 9 which Peri defines in conclusion as 'una discreta opin- 
ione di guadagno, posciache delle cose incerte dassi Popinione e delle 
certe la scienza.' He gives it expressly to be understood that speculation 
on future price alterations is covered by his statement, and he mentions 
in one breath both transactions of this kindandarbitrage proper whether 
in exchange, specie, money capital, or commodities. Here we need only 
deal with arbitrage and speculation in exchange and borrowed capital. 
The business men who engaged in operations of this kind had first of 
all to be possessed of what Peri called 'scienza,' i.e. a knowledge based 
either on experience or reliable information as to those matters whose 
influence either on Bourse prices or rates of interest could be predicted 
either with certainty or with a high degree of probability- We know 
already that the Italians in the Middle Ages had cultivated this 'science' 
with success. Its results were more or less perfectly imparted by the 
sixteenth century to business men of other nations. Unfortunately, 
however, the upshot was not great, for even in the sixteenth century 
the sum of the unknown factors in Bourse business greatly exceeded the 
known. These gaps had to be filled as best they might in some other 
way, and here we meet once more the ubiquitous activities of Bourse 

Bourse opinion drew from its continually flowing stream of news cer- 
tain general conclusions as to future development and kept these con- 
clusions in mind in filing the present Bourse price of exchange or loan 
capital, a process which in present Bourse parlance is called discounting 
(Bscomptiren) future events. In so doing Bourse opinion was always 
liable to serious errors and was sometimes purposely misled. For, in the 


first place, the prices of exchange and loan capital depended to an 
extraordinary extent on incalculable factors, e.g. the frequent altera- 
tions of the currency, which not only influenced exchange very greatly, 
but produced general ease in the money market when expected and a 
general tightness after the event. These also make the large field of public 
policy even more incalculable in the sixteenth century than now. 

Moreover, the number of speculators without any special knowledge 
or judgment of their own has always been particularly large in this 
class of transaction. For most holders of liquid capital, either small or 
large, could at one time or other do business directly or indirectly in 
exchange or loan capital and they were often inspired so to do on a con- 
siderable scale by the merchants of their acquaintance who were in 
relations with Lyons and Antwerp. This mass of persons, being in- 
capable of judgment and unversed in affairs, were easily led by the wish 
for easy profits, and so obtained a fatal influence on the prices both of 
exchange and loan capital. 

Finally, in the case of clever conscienceless habitues of the Bourse the 
temptation to mislead Bourse opinion was particularly strong. On the 
one hand were the risks of continual losses because the course of future 
prices was incalculable, and on the other the lack of judgment on the 
part of speculators. Above all, however, there was the prospect, not only 
of enormous profits, but also of high distinctions, honours and titles, if 
they succeeded in catching masses of free capital for the political ends of 
powerful monarchs. This temptation was too much for people of the 
type of Gaspar Ducci. 

From 1552 onwards a real madness or 'mania' for the Bourse loans of 
Antwerp and Lyons seized on the masses all over Europe, and the last 
vestiges of the science which should be at hand in all speculations was 
discarded, and a fever for profiteering rushed like a runner gone mad 
through the richest domains of all the old painfully gathered capital to 
meet the inevitable crisis. 

This, however, is not our final judgment as to the world Bourses of 
the sixteenth century. We reserve that to the end of this chapter. We 
must first consider a factor which is often put in the forefront of all dis- 
cussions as to the Bourse, though we would assign it a more modest 
role. We mean what is called 'Mobilization.' 

Mobilization of Loan Capital. Mobilization in the widest sense of the 
word is the process by which the transfer of economic goods of every 
kind is made easier by the creation and development of 'securities' 
which can be used in circulation. German economic doctrine, in so far as 
it uses the word at all, restricts it to the case of landed property. In all 
other cases of fixed capital the process is the same as for landed pro- 
perty; and even in the case of circulating capital, including all consump- 


tion goods, the nature of mobilization is the same. Its essence is that it 
creates a circulation of values, the only difference being that this is the 
only possible form of circulation for fixed capital, while in the case of 
circulating capital it goes on alongside of the circulation of commodities. 

A landed estate is mobilized by the issue of mortgages, a mortgage by 
the issue of sub-mortgages to bearer, a state loan by the issue of divided 
bonds, and a trading or commercial undertaking is mobilized by con- 
version into a company and the issue of shares; a ship's cargo by the 
pledging of the bills of lading; warehoused goods by the issue of war- 
rants; a bank balance by the issue of cheques; the bullion reserve of a 
note-issuing bank by the issue of bank-notes; a commercial balance 
abroad by the drawing of a bill; a bill by its endorsement, and so on. 
In each case the value of an economic commodity is put into circula- 
tion, by being incorporated in a document, or this same document, 
either through some addition or through the issue of new documents, 
is given greater currency. 

This is, however, not as a rule the usual definition for such documents, 
which at the beginning were meant for evidence of title. The general 

of circulating value, 'securities.' 

We cannot, however, enter into the meaning and nature of the circu- 
lation of values in general, but must concentrate our attention on the 
mobilization of loan capital. As the name tells us, loan capital belongs 
to the great circle of groups of economic goods which do not, like con- 
sumption goods, serve to the immediate satisfaction of human needs. It 
serves rather to produce new goods, and taken as a whole it may be 
designated from the point of view of the individual 'sources of income,' 
or from the economic point of view generally as 'capital' in its widest 

Loan capital in order to produce income must be lent out, that is, 
must be the object of an exchange for which it is pre-eminently 
fitted owing to its nature as money capital. Before this exchange is 
completed it is liquid, or free to be lent out for any purpose. Claims 
are not so easily exchangeable as monetary capital. The degree to which 
claims are exchangeable depends on circumstances present in very 
variable degrees. We have already seen what are the two most import- 
ant of these circumstances. These are the economic nature, the 
standardization (or fungibility) of the claims and the economic organi- 
zation of the business done in such claims. There is also a third factor 
to be mentioned, the external form of the claims, and in close connection 
with this the legal forms in existence for exchange transactions in 

Forma and legal principles which facilitate the alienation of claims are 


undoubtedly of great importance in the development of this business. 
The business will in one way or another call into being such forms and 
legal principles, if it has urgent need of them. On the other hand, the 
most favourable forms and legal principles cannot evoke a highly de- 
veloped business in loan capital, if the other factors are absent. This is 
particularly easy to prove in regard to the international Bourses of the 

Let us take first bearer bonds. The bearer clause is very old, but in the 
Middle Ages it was not meant to help the selling of the claim, but its 
enforcement through a representative. This does not, however, exclude 
the possibility that such securities might be transferred; but there was 
quite definitely no trade in bearer bonds in the Middle Ages or the 
searching investigations into such papers would certainly have revealed 
some trace of such documents. 1 

On the other hand, it is no less certain that in Antwerp in the first 
decades of the sixteenth century there was a regular trade in Bearer 
Acknowledgments of Indebtedness. This is evident from the often 
quoted order of Charles V of 7th March, 1536 (7). It is here expressly 
stated that in the Antwerp fairs goods were often sold against Bearer 
Acknowledgments of Indebtedness, and these were often transferred 
before they fell due without any formalities to third parties. Thereupon 
the drawees often refused payment on maturity and this gave rise to 
many lawsuits. This shows also that the habit of giving these bills in 
payment was of recent growth, for otherwise either the legal uncer- 
tainties due to the debtor's attitude would have been removed or pay- 
ment of this kind would have been discontinued. This latter alternative 
was not adopted, and the order of Charles V first declared the Bearer 
Acknowledgment of Indebtedness for a binding obligation of the same 
sort as a bill of exchange. 2 

The regular trade in bearer securities remained at first confined to the 
Netherlands, while in England bills payable to order, and in France 
those where no mention is made of bearer or order came gradually into 
use as a means of mobilizing claims. 3 

In Antwerp the Bearer Acknowledgment of Indebtedness, as we 
know, was used in deposit transactions on the Bourse, and it could either 
be pledged before maturity - the fact which originally brought it into 
being - or could be sold at a discount. This bearer bond was probably 

* Goldsohmidt, Universalgeschidae dea HandebrecMs, I, 390 B. Brunner in 
Ztsckr. f, Handdsreckt, XXH, 41 ff. 

* Plac. de Brabant, I, 515. Antwerp, 'Gebodboecken' in Bulletin dea archives 
d'Anvers, voL I, e.g. p. 276 (1563), p. 326 (1576), p. 344 (1579), etc. 

* Cf. for England Malynes, Lex Mercatoria (1622), ch. 11 and 12; Child, A new 
discourse of trade (1693), p. 7, 106 ft. 'Billets en blano,' 1601, in Docum. hiietar. 
inedits, voL IV, p. zziv. Cf. Goldschmidt, Lc. p. 397. 


the kind of acknowledgment of indebtedness which could be passed 
from hand to hand with a discount in regular exchange business. 1 The 
Bearer security accordingly first came in as a means of mobilizing loan 
capital in the sixteenth century. The bill, on the other hand, still re- 
mained frozen in medieval immobility. The first traces of bill endorse- 
ments and bill discounting did notappear before theend of the sixteenth 
century, and only gradually developed during the seventeenth. We 
need not discuss here the economic causes of this development, which 
hitherto has only been dealt with by jurists. In short, therefore, dur- 
ing the whole time when the international Bourses of the sixteenth 
century were most flourishing there was not sufficient need for the 
mobilization of claims embodied in bills to call forth the necessary 
external forms. When in Antwerp at the beginning of the sixteenth 
century the need to mobilize commercial claims was more felt, the 
long-established form of the Bearer bond was used and the bill retained 
its ancient form. 

The correctness of our view is upheld if we consider credit trans- 
actions with the Government. All Netherlands bonds of the sixteenth 
century which I have ever seen contains the bearer clause. Yet these 
bonds, with the possible exception of those of the Receivers General, did 
not change hands so often as those of the French Crown, which had no 
bearer clause and could only be transferred, may be proved from speci- 
ments in the archives of the South German nobles - with an almost 
incredible amount of formalities. French transfers were long-winded 
documents in an old-fashioned difficult Chancery style drawn up in 
the presence of the parties by a notary and witnesses. They contained a 
complete recital giving the text of the original bond. If the whole claim 
were not transferred, this remained in the hands of the person who in 
name was the sole creditor, and all transfers had to be endorsed on the 
back of it. The original bond was usually issued in duplicate. Each one 
usually carried a whole series of transfers, some referring to capital and 
arrears of interest, others to capital without interest, or only a part 
of the interest, and others to interest alone. 

All this did not prevent a lively business in the 'King's Letters.' In 
Lyons, from about 1550, they became in fact the object of large and re- 
gular dealings on the Bourse. This business took matters into its own 
hands by dispensing often with formal transfers and using letters and 
other more or less informal documents till perhaps at last the fifth or 
tenth buyer fulfilled the necessary formalities. This naturally gave rise 

i Cf. e.g. Tartaglia, Trattaio <K numeri e misure (1556), 1, 193 ff. 'DUoontes ou 
Rabats,' Michel Cognet, it'we d'ariihmetique, Antw. 1573. For 'esoompte' in the 
seventeenth century, see Cleirac, Usance du negoce ou commerce de la banyue et 
des lettres de change (1656), p. 153. 


to many disputes, but the Bourse business continued till the destruction 
of Lyons' commercial prosperity brought it to an end. 

Conclusion. Our investigation is like climbing a mountain, terrace by 
terrace. We here reach a point where we may turn and look for a 
moment at the view, but we are still far from the summit. 

The mediaeval beginnings of capital Bourses practically did nothing 
but help the capital transactions of the merchants in the markets. 
They had not as yet the power of attracting to themselves capital 
scattered about the world. Such capital, in so far as it was invested at 
all, was in part lent direct to different princes and in part had found its 
way -also indirectly -into the coffers of the numerous cities, or, 
finally, a small proportion had reached the Italian business houses, who 
put it out at a great profit. 

Through a thousand small channels, small driblets of capital had 
flowed through the narrowly fenced-in fields of mediaeval industry, 
sometimes fructifying and sometimes getting lost in the sand. A few 
larger streams had indeed come into being, but not yet any great central 
basins. We know, however, that the need for such large concentrated 
masses of capital was growing very rapidly. 

We have seen that in the 'Age of the Fugger' this need was at first 
satisfied by the great financiers, who at the beginning used chiefly their 
own resources and then gradually came to rely more and more on 
borrowed capital. 

Meanwhile the international transactions of Europe, whether in 
commodities or exchange, had quickly concentrated in Antwerp and 
Lyons. This brought large masses of capital to both markets, and a 
market rate grew up for the best commercial paper Ditte di Borsa, so 
comparatively low that the large financiers were able to satisfy their 
credit requirements both easily and cheaply. 

Princes needing money had in their turn tried in early days to borrow 
in the international markets. They, however, had to learn that it was 
no simple matter to collect liquid capital for their purposes. They 
had at first to pay extraordinarily high rates of interest, and even then 
could only collect small sums with great difficulty. For a long time, 
therefore, they had to try to satisfy their extraordinary credit require- 
ments by other means, an attempt in which they were only partially 

A change came about when leading financial experts in their service 
began to attract capital from all sides for their loans in the market, and 
consciously to increase and turn to account the inclination already pre- 
sent in many quarters to wish for a high return on their money without 
any effort. 

The boom in capital transactions which now began in both markets 


was certainly of an unhealthy type. Its causes, whether moral or 
economic, were equally dubious, and the same is true of its immediate 

Tet all the same these capital transactions in the world markets of 
the sixteenth century constitute a forward step of enormous importance 
in civilization. For the first time business in the different markets had 
brought together capital from every side on such a scale as to satisfy 
the largest demands of the most important princes, and to reduce by 
half the rate of interest on their loans. 

This made it possible to raise large masses of capital at moderate 
rates for all the modern developments of civilization and for all the 
national ends of the different peoples. 

This was the first step on the way to reduce the power of the in- 
dividual financier within bearable limits. Though the financiers might 
successfully avail themselves of the advantages offered by the world 
markets and so at first increase their own power, yet the world Bourses 
have more than anything else helped to make impossible the state of 
things prevailing in the 'Age of the Fugger.' After they arose, it was no 
longer possible even for the most powerful individual financier to deter- 
mine the course of the world's history. 



NOW that we have got to know about the rise and fall of the 
financial powers and the world Bourses of the sixteenth century 
we must briefly trace out till the end of the period the form of public 
credit in those countries where the South German and Italian financial 
magnates succeeded in preserving some of their importance even after 
the first crisis. We must add to this a sketch of the further development 
down to the present time. Only in this way is it possible for us to form a 
final judgment in the historical and industrial significance of the Age of 

Spain. We can describe Spanish finance in a few words; it passed 
hopelessly from one crisis to another. State bankruptcy and compulsory 

intervals of about twenty years -1557, 1575, 1596, 1607, 1627, 1647. 
So far as concerns the compulsory consolidation always connected with 
them it is enough to mention an expression of Peri. He characterizes a 
new kind of Spanish Juros as a kind of compulsory payment (una sorte 
di pagamento data e rieewto da qualch' anni in qua per necessitd). He adds 
that they can only be sold at a great loss, since there is such a large 
quantity of them, and since they are only paid in copper, although they 
purport to represent silver money. Hence it came to pass that at the 
beginning of the seventeenth century Spain had a copper standard in 
spite of its inexhaustible silver mines in America. 

The individual crises are not sufficiently interesting to require a de- 
tailed account of them. On the whole they are similar to that of 
1575-77. The state bankruptcy of 1596 was put an end to after a 
year and a half by a compulsory consolidation. 1 The number of financial 
associations affected was again only small. But behind them was an 
excessively large number of sub-shareholders who, as in 1577, had also 
to accept payment in depreciated Juros. To carry this out the financial 
associations distributed the Juros to their shareholders, then again to 
theirs, and so on, till the last small capitalist was reached - an operation 
which was called 'Tanteo' (settlement). When this at last was finished 
the Spanish financial officials declared that the total debt was much 
smaller than had been supposed. This naturally gave rise to endless 
difficulties and disputes. The credit of the Crown was for a time 

* Cf. Conga Arguellee, Diedonario de hazimda v>: Aereedoroa al Estado; Habler, 
Die Finamdekrete PMKppt II; Scaccia, Tract, de comma-cut et camWts, 2, GL B, 

destroyed, which more than anything else contributed to compel them 
to the unprofitable peace of Vervins. The political situation was 
similar, only much more unfavourable for Spain than at the time of the 
peace of Gateau Cambresis (1559). After making the most powerful 
efforts to attain the hegemony of Europe, Spain only succeeded in ruin- 
ing itself. 1 

When Philip II died he had three times broken his word to his 
creditors. Under his successors the business was managed even much 
worse. It is related that in 1601 the King's confessor was the actual 
manager of the finances, which consequently were in hopeless disorder; 
that the Court officials could not be paid, and so on. Four years later 
it is said that all the sources of income were mortgaged. If we ask how 
it was that in spite of this the Crown could wage war and build costly 
palaces, the answer must be that the secret was that almost no one 
was paid. Often the money for the King's table was lacking. The most 
necessary payment to the troops were provided by the Genoese, who for 
this took mortgages on the revenues for 5-10 years in advance. 2 

In November, 1607, once againpayments to the creditors of the Crown 
were stopped. In this, as was usually the case in these State bank- 
ruptcies, the theologians gave a helping hand to justify the breach of 
faith. It took a year before the usual agreement was come to. Mean- 
while, in spite of the suspension of payments, the Crown was in such 
financial difficulties that it could no longer carry on the war in the 
Netherlands and had to conclude a twelve years' truce. 8 

But in the following year too the Asientos for Flanders and Italy went 
their way. The Genoese, as always, had to come to the rescue, to save 
their old claims; and the Crown required strong garrisons and many 
officials to hold the southern provinces of the Netherlands or Italy. The 
confusion of the finances became more and more desperate. "When 
shortly before 1613 the celebrated writer Garcilasso de la Vega made a 
pressing request to Morales, the King's secretary, to let him know, for 
the purpose of his great work on the wars of the Spanish in America, 
what was the amount of the royal revenues, Morales said that no human 
being, not even the King himself, was in a position to do that; the King 
was most anxious to know what his revenues were, but the measures 
which he had ordered for this purpose had not yet been taken in hand; 
it was, moreover, an almost impossible task. 4 

> Ranke, Frz. Geachichte, II, 31. Barozzi e Berehet, Bdaz., ser. I, voL I, p. 70. 
See letter of Venetian envoy. 

> Cabrera, Belac. de las come swxdidas en la Corte de Evpana desde 1599 hatta 
1614, p. 117 fi.; Barozzi e Berohet, Lc. I, p. 329 fi. 

> Cabrera, I.e. p. 354; Fugger Archives, 43, 4 and 2, 5, 16. 

'From trench edition of the works of Garcilasso de la Vega, Histoire dee 
Guenes CivOes des Evpagndle dans Us Indee. Paris, 1658, 1, 18. 


When the war started off again both in Italy and in the Netherlands, 
when the German branch of the Hapsburgs in the Thirty Years War 
had to be rescued from the heavy straits they were in by means of 
large subventions, the Spanish finance degenerated into mere robbery, 
which reached its height in the years 1627 to 1632. In 1627 exchequer 
payments were again stopped. Further, the Grown repeatedly confis- 
cated the silver coming from America for private people, and even con- 
templated seizing the deposits of the banks. Copper money was alter- 
nately coined and debased. In short the Fugger agent was entirely right 
when he wrote to his masters that might went before right. There 
was no longer government, but only tyranny. Naturally all credit was 
destroyed, the people, impoverished, partly as a result of the terrible rise 
in prices due to the bad currency, were straightway abandoned to star- 
vation. In Italy the situation was the same. In Genoa, where everybody 
had an interest in the Spanish claims, the ruin began to be general. 
The great Genoese banks had come to the end of their resources, the 
Fugger were completely ruined. 1 It seemed that the end of the Spanish 
monarchy had come, and yet things went on just as before. A few ex- 
pressions of the Venetian envoys will suffice to show this. In 1647, when 
again the assignations of all Assentists, except those of the four largest 
financial houses of Genoa, were annulled, the royal revenues were mort- 
gaged till 1654. They had not shrunk from mortgaging many of them 
twice over to different creditors. A Venetian, telling of these things in 
1653, observes with bitter scorn that in order to understand how the 
richest country in the world had become the poorest one must first be 
convinced that no people in the world were so ignorant of the art of 
good government as the Spanish. In 1673 we hear of 40 per cent, 
interest which the Grown had to pay, and in 1686 Spanish finance is 
depicted as a horrible chaos enveloped in impenetrable darkness. In 
1700, when Garlos II, the last of the Spanish Hapsburgs, died, there 
was not enough money in the Royal Treasury to defray the cost of the 
funeral and the Masses for his soul. 2 In this condition Spain came under 
the sway of the Bourbons. They did not save the unhappy country. 
This is intelligible enough, because the ruling house was never able to 
conduct for any length of time a wise financial and industrial policy in 
its own rich and powerful native land. It is unjust to make the Haps- 
burg dynasty primarily responsible for the financial ~' J ~ 

and the other misery which Spain had to endure during their rule. The 

* In addition to Peri o Fogger Archives, 2, 6, 17, also M enure Fnmfais, v. 
1630 ff.; BaroEzi e Berohet, I, 647, for Italy,*, Cautfi. SuUe star. d. Lomb. del gee. 
XVIL (Comment, ai Promessi sposi de i Aless. Maznoni), Milano, 1832, and 
MisceU. d. Oar. ital. V, 147 ff. 

* Barozzi e Berohet, II, 178, 202 ff., 242, 284, 390, 529 ff., 660, 682. Cf. also 
Mignet, Negoc. rOat. a la iuccessim d'Espagne, t. IL 

reign of Ferdinand and Isabella, nominally the golden age of Spain, 
began with a State bankruptcy and ended with such a burden of debt 
outstanding that Charles I (V) had repeatedly in vain to be reminded to 
liquidate them 'to disburden the souls of the Catholic Kings.' Even 
in more recent times Spain has kept true to its habit of going bankrupt 
about every twenty years; for since 1820 under the Bourbons and the 
republic there have been State bankruptcies in the year 1820, 1837, 
1851, and 1873. It is plainly an inner necessity which outlives cen- 
turies. The comparison can be drawn further. How remarkable it is, for 
instance, that the last good security which remained for the Fugger's 
claims in Spain was the Almaden quicksilver mines which they worked 
themselves, and that there mines in the most recent times again proved 
to be the only security which was undoubtedly good to the Spanish 
creditors who had the sufficient foresight to obtain a mortgage on them 
and to manage the mines themselves! Further, it was the Eothschilds, 
the Fugger of the nineteenth century, who took over the working of the 
Almaden mines as a result of their financial transactions with the 
Spanish Government. In fact the history of Spanish finance is instruc- 
tive for anyone who is willing to learn from it. 

France. We already know that during the wars of religion French 
finances continually went from bad to worse, and that finally, about 
1575, in Lyons the Crown could not obtain any more loans. In the next 
year part of the dividends on the rentes of the State had to go unpaid. 
This aroused the greatest discontent in Paris. Soon after we hear that 
in Lyons the obligations of the French Crown were offered at 30 per cent, 
of their face value. In the circles of the German creditors of the State 
this was attributed to the machinations of individuals, and complaints 
were made to the Government and to the Augsburg Council that Oswald 
Seng and Christopher Neidhart had depreciated their obligations to the 
damage and contempt of the credit of the French Crown. Finally, in 
1580, all the assignations given to the creditors were recalled, and even 
the officials were no longer paid. 1 

This bankruptcy was on a level with that of the Spanish Crown five 
years earlier. But, unlike that of Spain, there soon appeared in France 
new financiers of Italian origin, like Diaceto, Eucellai, Sardini, Martelli, 
Rametti, and others, who again did business with the Crown, which 
certainly, as in Spain, got the worst of it. The Chancellor Chiverny, 
the Intendant of Finance d' 0, and other highly placed persons took part 
in these transactions. It even occurred that a financial syndicate gave 

Desjardins, J^fcoc. dipt., IV, 71, 323; Monfaloon, Hist. man. de Lyon, H, 417. 
Bodin, 1577: 'A present le pluspart (i.e. of the State creditors) veut quitter 1'inter- 
est et le sort principal s'il se trouve qui veuffle donner trente pour Cent une fois 
payee.' Of. A^burger St. A. Handel*chen No. 26 (22) and No. 28. 


the King himself a douceur of 25,000 ecus in order to obtain a profitable 


This was the time when the hatred of centuries of the French for the 
Italian financiers again burst out, when the estates assembled at Blois 
in 1576-7 brought forward to the King the complaint we already know 
of against the foreigners. 'They fall upon our country (it runs) with a 
pen behind their ear or with a dagger at their side, this is all they possess 
when they arrive; but they know how to acquire boundless riches with 
it.' In fact they interfered with the foreigners, made it difficult for them 
to trade or set up banks, did not allow them to be officials of the State 
or the Empire. But their ability and their capital could not be dis- 
pensed with. In spite of the empty Treasury they always knew how to 
track out new financial methods, which certainly got the dubious nick- 
name of 'inventiones sanctae crucis.' To exclude the competition of the 
French farmers of taxes Eametti and his syndicate offered in 1584 to 
pay off 800,000 ecus of the King's debts, on which the profitable lease 
of the Gabelle was made over to him because the French had not 
command of such a sum. 

This was the time when Bodin and others loudly denounced the con- 
tinual borrowing by the Crown, when Nicolas Barnaud, under the 
pseudonym of Fromenteau, showed that since Henry II ascended the 
throne to the end of 1580 loans of not less than 128 million livres had 
been incurred. 1 The Crown perceived that it was necessary to do some- 
thing to re-establish its credit and seriously considered liquidating its 
debts. This produced comparative quiet at home for a period of some 
years, which did not cease till 1586. Then this offer of the Eametti 
was a welcome one. The German creditors treated through Marx 
Kraffter with some Swiss about the sale of their claims. They were 
offered 25 per cent, for them and this would have gone to 40 per 
cent. But the Nurembergers would not accept this 'Miseria,' and de- 
manded 75 per cent., 'since now there is peace in France and the King 
will pay off all his debts.' They had soon to rue their excessive clever- 
ness; for the King paid back only 70,000 in all, that is only a few per 
cent. The civil war broke out again, and in the last years of Henry III 
the mismanagement reached its highest point. 

'More than ever before,' a contemporary tells us, 'the Eentes in the 
Hdtel de Ville of Paris remain unpaid to the destruction of many poor 
widows and orphans.' Unquestionably the irritation of the citizens of 
Paris at this was one of the causes of their going over to the camp of the 
League which was then fighting against the Crown. Certainly this was 
the chief cause of the 'Day of Barricades' (1588). When finally at the 

*Le Secret da Finances de la France (1681), I, 13. For what follows, Bee 
Scheuerl Archives in Nnremburg. 

end of the year the leader of the League, Henri de Guise, was murdered, 
when eight months later the King suffered the same fate, it was natur- 
ally once more all up with the credit of the Crown; there was no longer 
a recognised King. Already after the death of the Due d'Anjou (1584) 
the opinion had been correctly expressed in the circles of the German 
creditors that it was very risky that 'the debts of the French Crown now 
only stood on two eyes.' When these were shut, when an assassin's 
dagger struck down the last of the Valois, the creditors of the Crown, 
as we see from one of the Fugger letters, lost their credit. This par- 
ticularly affected the Florentines. We already know that at that time 
the Capponi - the last of the great Florentine banking houses in France 
-passed into other hands. 

It took about six years after the death of Henry III before the Bour- 
bon Henry IV could really feel himself to be King and before the con- 
dition in the State had again been got into a certain amount of order and 
thus made possible a serious financial reform, which now was taken in 
hand by Sully. He has been justly praised for carrying through this 
reform; but it cannot be denied that the most important part of it was 
a State bankruptcy. A considerable reduction was compulsorily made 
in the rate of interest of the State rentes, some down to 4 per cent.; and 
many millions of debts were not recognized as legitimate. In vain the 
rentiers and other creditors protested; among them some who had been 
reduced to great straits by these measures. On the main point Sully 
remained inexorable. 1 If we reflect that in 1596 the King had expressly 
recognized his liability for his predecessor's debts, from a moral stand- 
point the whole measure appears to be hardly any less dubious than 
one of the Spanish bankruptcies. Yet it was necessary, and in contrast 
with Spain, Sully did not content himself with the inevitable breach 
of faith, but took pains to introduce economy, order, and honourable 
dealing into the management of the finances. 

But this state of affairs vanished again. On the murder of Henry IV 
and the fall of Sully a new period of financial mismanagement began; 
this lasted till Colbert took office. French finance at that time only 
differed in degree, but not in kind, from that of Spain. We cannot here 
depict the whole development, and must content ourselves with em- 
phasizing a few characteristic details.* 

'We have had to use Oeconomies royales, ColL Petitot, ser. II, vols. 1-9, 
though Ranke doubts them. Eoth.GteacA. d. Nvrnberger Handels, H, 21. Archiv. 
des Nvrnberger Handels Vorstandes. 

> Of. Gramont, Le denier royal (1620); Barin, Eistoire de Louis XIII; Mercure 
Erancais (1617 fi.}: Barozzi e Berchet, Rdaz., ser. II, vol II; Journal fOrmesson, 
ed. CherueL Moreau, Choi* des Massarinader, Bresson, Hist, fi 
Defense de Fouquet (1665);Ranke r Prans.fl'*c^ 


The extravagance of the favourites Concini and Luynes was followed 
by Richelieu's far more costly Imperialism. Since the financier Herwart 
had succeeded in 1630 in inducing the troops of Bernhard of Weimar to 
pass over into French service, the Crown had continually to maintain 
an army of 100,000 men. This was the first standing army of importance 
in Europe. Then came the boundless corruption of Mazarin, whose 
finance ministers helped him to plunder the public treasury. The 
complaints from which French finance was then suffering, were still the 
same as they were in the sixteenth century; on the one side the crushing 
burden of military expenditure and the outrageous prodigality of the 
Court; on the other side - farming of taxes, bargaining for offices, the 
splitting up and dishonesty of the financial administration. This pro- 
duced a deficit which increased like an avalanche, and a floating debt 
which increased just as fast. There was nothing new in the grievances 
of the people which it condensed into criminal charges against the 
financiers. For example, in 1661 Fouquet was accused of putting in the 
accounts invented and unnecessary payments, of himself lending money 
to the Crown at high rates of interest, and having an interest in farm- 
ing the taxes, that he allowed himself to be bribed by the farmers of 
taxes, that he mixed up the monies of the State with his own, that he 
had bought up worthless State debts and put them down at their full 
value, and generally that his administration was bad. Fouquet was 
entirely in the right when in his defence he declared those were mostly 
old-established abuses and he had only obeyed the orders of Mazarin who 
took each year 25 to 30 millions for secret expenses. Fouquet had to 
advance them and justly observed, 'It was my money when it left my 
chest and became the King's money when it passed into the hands of 
his Eminence.' Here we get to a development, which, it is true, was then 
by no means new, but which took on in France a quite different charac- 
ter: we refer to the nature of the relation between the minister who 
directed the finances and the people with money who supported him. 

At all times, at any rate since Francois I er , there were two classes of 
moneyed people which could satisfy the needs of the Crown for loans. 
There were the well-to-do bourgeois (aises) and the professional money- 
lenders, who now were usually called 'partisans' because they had 
'partis' (monetary transactions) with the Government. The means of 
the former class were utilized partly by compulsory loans (taxes des 
aises), partly by issuing rentes; those of the partisans by the farming of 
taxes and the anticipations always connected with this. 1 Of these two 
classes the partisans were by far the most influential, because the 
Government had the most pressing need of them. So long as the taxes 

* Journal d'Ormesam, ed. Ch6ruel, I, 214, 415. 

tion could be carried on without their help and credit. But on the other 
hand the partisans were dependent on the financial administration, 
which gave them the opportunity of making very great profits, and 
which could leave their claims unpaid it they refused further assist- 
ance. Prom this gradually the minister who directed the finances had 
his own retinue of financiers. By the sixteenth century, both in Spain 
and France, there were important tendencies to this. Under Sully, 
who tried to avoid anticipations, the partisans for a time retired to the 
background. In return Sully was the chief of a family clan which was 
politically important. On the other hand, under his successors the train 
of followers depending on financial interests developed more and more, 
this finally, under Mazarin and Fouquet, acquired political import- 
ance. At this time the expression 'partisan' took on a new meaning, 
which it has retained to the present time; meanwhile the original mean- 
ing was lost. The word was used as a common expression for 'uncon- 
ditional adherent.' This means that the finance minister domineered 
over his partisans, owing to the fact that he himself more and more 
became the chief banker of the State and that his credit was decisive 
for the Grown. Sometimes this had been the case earlier; yet as a rule the 
person who directed the finances of the State played a tolerably insigni- 
ficant role compared to the financial magnates. But now he became 
their chief; yet he could not make himself independent of the Crown and 
the chief minister. Fouquet was accused of trying to do this and it 
caused his fall. But a serious political danger could scarcely be avoided. 
The change which at that period came over that class of professional 
financiers is of profound significance; first the foreigners were gradually 
replaced by Frenchmen. What the hatred of centuries of the French for 
the Italian moneylenders could not do, was now brought about by their 
own exhaustion in combination with the increasing ability of the home 
competitors. The end of the Italian financial business in France is 
marked by the unrest of the Fronde and the State bankruptcy of 1648. 
The last foreigner who played a conspicuous part in French finance was 
the South German banker Herwart-who certainly was already con- 
siderably gallicized and who was active at the beginning of Colbert's 
time. On the other hand, at the end of Mazarin's time the great 
majority of the Partisans were French. They were almost entirely 
people of the lower classes, creatures of the Finance minister, partly 
even lackeys and the like, who associated together and in the main 
worked with the money of private people, to whom they paid relatively 
high rates of interest. They themselves charged the Crown at least 15 
per cent., but under some circumstances this went up to 50 per cent, or 
60 per cent. This is the humble origin of the Parisian world of finance. 
It is obvious that such people had to be unconditionally attached to 


their protectors the Finance ministers, who therefore as a rule treated 
them kindly, helped them in money difficulties and often kept them 
from bankruptcy. 1 On the other hand, there were among them people 
like that Giradin who at Fouquet's request made advances to the Crown 
up to 3, 4, or 5 millions, and apparently without any profit to himself, 
in view of the interest which he himself had to pay, and without any 
security except Fouquet's promise to pay. He directed a large financial 
syndicate which in 1655 took over the lease of the Gabelle. 

The people got no advantage from the fact that the Italians were 
replaced by French Partisans. They were just as oppressive as farmers 
of the taxes; as creditors of the State they took at least as much interest 
and as satellites of the influential courtiers they belonged to a class 
which the people was more and more accustomed to regard as parasites. 
They were hated as arrant bloodsuckers. Through their position, as we 
saw, they had a great advantage over the other class of creditors - the 
rentiers; for as a rule the State treated them much better than the 
rentiers, who not infrequently had to complain that their dividends were 
not paid in full. In addition the Partisans carried on an extensive trade 
in offices and liked to remember their friends and relatives with the 
fattest places. This naturally again gave occasion for more oppression. 
So it is not surprising that by 1615 the name Partisan was hated 
throughout France. This again led to lively complaints of the estates 
and Parliament against the financiers and to the repeated appointment 
of commissioners of investigation as there had been before. They could 
call individuals to account, but could make no change in the system. 
The revolt of the rentier of Paris in 1638 and the unrest of the Fronde in 
1 649 had just as little success,but we must delay a moment over the latter. 

In 1648 the financial position was as bad as could be imagined. The 
revenues of the Crown were anticipated three years in advance. There- 
upon the Parliament obtained the institution of a chambre de justice 
against the Partisans, and in October there resulted a general suspension 
of all money orders which had been given to them. It was a State bank- 
ruptcy quite in the style that was usual in Spain. Payment of the 
dividends should not be stopped, but should have priority over the 
claims of the Partisans. Yet the rentiers soon had to complain agaia^and 
this was easily made use of by the discontented nobles of the Fronde to 
stir up Paris against Mazarin's Government. At this critical moment 
the Crown had absolutely no credit; the Partisans neither would nor 
could help. Every possible suggestion for getting money was made. 
Taxes which had been imposed and compulsory loans were not paid. 
Turenne's army got no pay and threatened to go over to Che Fronders. 

1 See Catalogue des Partisans, or Moreau, Choix des Mazarinades, I, 113, 179, 
287; Defence de Fonqnet, II, 98, 133, 207, 236, 246, 296, 312 ff. 

The Court sent off the banker Herwart to appease Turenne and satisfy 
his troops. He failed in the first; to the extreme horror of the Court 
Turenne set out on his march to Paris. But he soon found himself 
deserted Toy his troops, whom Herwart had alienated by paying their 
arrears of pay. Voltaire was right in saying that this event showed that 
only the man who has money is the lord. This was the last occasion 
when a financial magnate, quite the dramatic style of Jakob and Anton 
Fugger, interfered in the course of the history of the world. The praise 
too which Mazarin lavished on him in the presence of the King before 
the assembled Court is also in the style of the heroic age of capitalism 
which we have called the age of the Fugger. Mazarin declared that 
Herwart had rescued France and preserved the King his crown; that 
this service ought never to be forgotten. In fact Herwart, as we have 
already related, though he was half a foreigner, and a Protestant into the 
bargain, advanced to one of the highest positions in the financial admin- 
istration and later still higher, till Colbert made an end of his career. 
Just as Herwart was the last French financier of the old stamp, so 
Turenne was the last French general, who, at any rate in his earlier days, 
had a good deal of the Condottiere in him. Only after Mazarin's death 
did he become exclusively a faithful servant of his lord. Now came the 
time when Louvois got the army completely out of the hands of the 
war speculators into those of the King, 1 as Colbert had tried to do with 
the finances and the financiers. Colbert's aim was to reform the whole 
financial administration; he wished to centralize it and by doing so to 
increase the revenues of the Crown and at the same time to bring them 
into harmony with the expenditure, so that anticipations would no 
longer be needed. He further intended to liquidate the funded debt 
entirely: partly because it was charged on the best and most certain 
revenues, and also because whenever the payment of the rentes in bad 
times got in arrear, this gave the agitators an occasion for stirring up 
the rentier against the Government. He called the rentiers idlers who 
consumed the fruits of their fellow-citizens' labour. Bodin a century 
earlier held the same opinion; the great theorist was a hundred y>ars in 
advance of the great man of action. 

But Colbert himself had soon to abandon such wide aims and make it 
his chief object to suppress the power of the Partisans more and more. 
He could not get on without them; but he turned them into pliant tools. 
He said once, 'A financier should behave towards the finance ministe 
like a soldier towards Ms general; he should never leave him so long as he 
lives.' He tried with all the means in his power to cany this principle 
into financial practice. 8 

* Jains, Heeresverfaumngen und VSOzrleben (1885), p. 261. 

Clement, Lettrea at memoires de Colbert, H, p. cxcix. 


What Colbert achieved is a matter of history. Above all, by raising 
and consolidating the duties he greatly increased the revenues of the 
Crown; so he changed France into an uniform huge economic area and 
began to replace the predatory and short-sighted fiscalism of earlier 
times by a consideration for the people's welfare based on a broader 
outlook. By this he, at any rate on the Continent, became the pioneer 
of a new economic system. That his object was primarily fiscal in no way 
detracts from the great reformer's services. But, as every one knows, his 
economic and financial policy had soon to stop, because it was thwarted 
by the unbridled imperialistic policy of his master. This is best seen by 
following out the development of the public debt. One of Colbert's first 
measures was to reduce the rentes, in which he followed in Sully's foot- 
steps except that he proceeded in a much more inconsiderate way. In 
1660 he at first kept back a third of the rentes then due on the Hotel de 
Ville at Paris. Further reductions followed, till it was finally appointed 
that all the rentes created under Fouquet, whose present holders had 
bought them considerably under par, should be compulsorily repaid at 
a rate which left the holders almost nothing over, and Colbert even 
wanted to bring into account against the capital the rentes already paid. 
The rentiers protested; there were riots in Paris; there was a slight 
mitigation, so far as in determining the rate at which the rentes were 
to be paid off, the procedure had some fairness. A commission, in con- 
junction with the Paris magistracy and taking into account the changes 
since 1st January, 1639, fixed the rate. That occurred in 1664. In the 
next year Colbert reduced the legal rate of interest to 5 percent., and 
amongst others gave as his reason for this measure that the high rate of 
interest introduced by the money changers ('le change et rechange de 
1'agent') and the exorbitant profits of the rentiers'promoted idleness and 
hindered the development of Trade, Industry, and Agriculture. 1 

In this way Colbert at first succeeded in disburdening the Treasury. 
Yet his proceedings were just as much a State bankruptcy as Sully's 
were and they excited the same hatred of those affected by it. What 
was worse was that in the long run he could not get on without new 
enormous loans, especially since the disastrous war of 1672 - a land- 
mark in the industrial and financial history of the seventeenth cen- 
cury - and with a heavy heart must again enter on iihe precipitous path 
of borrowing. 2 Before he decided to do this, he had not hesitated to 
resume the traffic in offices on a large scale, and incited the financiers 
by placing the offices at their disposal at 16 per cent, below their 
nominal selling value. But as the many millions which the war required 
were not to be got in this way, Colbert in 1672 had to proceed to an 
* Ctonent, II, introd. xlix. and 756. 
. BaSlly, 1, 462 ff.; Viihrer, I, 96; Clement, voL H. 

issue of rentes, and in the next year to floating loans and anticipations. 
During the ten years of Ms administration lie often had to turn again to 
credit. But MB procedure was essentially different from that of the 
former Finance minister; and here again he appears to us as the pioneer 
of a new epoch. To avoid the costly intervention of the financiers, Col- 
bert in 1674 formed a State central savings bank {Caisse des Emprunts), 
into wMch anyone could pay money. The State paid 5 per cent, interest 
and promised to repay the capital on demand, wMch was secured on the 
rents from the tax-farming. In this way it became possible for the State 
to obtain at a low rate of interest considerable floating loans - usually 
14 millions, but later as much as 20 million livres. Colbert also re- 
formed the method of getting money as a funded debt, by applying to 
the rentes the principle of publicity which he had formerly only used 
in connection with floating debts. Since 1679 Colbert issued the rentes 
for public subscription and attained brilliant results. Earlier Paris 
had been the chief market for the rentes issued by the State; now the 
provinces and foreign countries were drawn in, and Colbert even knew 
how to manage skilfully the modern technique of oversubscribing. In 
1679 in 18 days 2 million rentes (= 34 million capital) were issued, on 
wMch he then offered for issue a further 5| million rentes and repaid old 
debts wMch carried a higher rate of interest. 

There were similar operations in 1682 and 1683. Pressure and dodges 
were used to induce the holders of rentes announced for repayment to 
accept rentes at a lower rate of interest instead of cash. 1 

By 1680 Colbert had represented to the Ring that credit had already 
produced 40 millions; he dared not strain it any further, otherwise the 
deposits would be withdrawn from the Caisse des Emprunts and they 
would be on the verge of bankruptcy. In the next year he pointed out 
emphatically the misery of the people due to the pressure of taxation 
and that the new outbreak of war must cause an enormous increase in 
the burden of interest. He continued his warnings, but without success, 
and when he died in 1683 the budget was again disorganized. Under 
Ms successors French finance again took the devious path which had 
led Spain to economic ruin. They led France to the Revolution. 8 

England in the Seventeenth Century. Where France and Spain re- 
tained the mediaeval character of their financial arrangements down to 
the threshold of modem times, in England a successful attempt was 
made in the sixteenth century to reform the financial administration 
fundamentally. Gresham had given it a strongly national character, 
and had endeavoured to permeate it with the commercial principles of 

1 Bailly, 1, 465, 477; Vuhrer, 1, 103 fi.; dement, voL H, introd. and pp. 102, 372. 
' a. Boisguillebert,Ze Detail de la France (1697) in Daire,p. 236; also Faetom 
de to France (Lc. p. 296). 


honour, order, and economy. This succeeded to a remarkable extent. 
The foreign moneylenders gradually vanished from England, whose 
capital proved to be sufficient to satisfy the needs of the Grown in many 
difficult situations. On the Continent too its credit remained unshaken 
during the most severe crises, because Queen Elizabeth differed from 
other monarchs, by never breaking her word to her creditors, as she 
justly boasted in 1576. 1 

But in the long run Gresham's financial programme did not prove 
suitable for all contingencies. As a rule Elizabeth could not raise a loan 
without using compulsion. In the later years of Elizabeth, Privy Council 
loans (compulsory loans) were the most common way of meeting tem- 
porary extraordinary financial needs. But after Gresham's death she 
was so economical that she left only an insignificant burden of debt for 
her successor, but as a set-off a valuable treasure in jewels, which she 
partly had received as presents; for, as soon after a Venetian envoy 
pointedly remarked, 'Her Majesty liked getting more than giving.' 2 

Under Elizabeth's successor James I, and still more under Charles, the 
finances again fell into terrible confusion, and the burden of debt in- 
creased noticeably. At the death of James many salaries were in arrear. 
The absolute amount of the floating debt there was no funded one 
appears moderate in comparison with that of France and Spain; but it 
was much too big for the English people, especially as the Crown con- 
tinued its practice of forced loans. 8 

But what Elizabeth could presume to do, called forth general in- 
dignation if attempted by her successors. The first compulsory loan 
which Charles I wished to raise (1626-7) led to the Petition of Eight, 
and the King promised that he would never again exact compulsory 
loans. In fact there were no more of the old kind. Certainly the "King 
more than once put more or less strong pressure on the City of London, 
to induce them to consent to loans in which anyone could participate 
at his pleasure. These loans bore a certain resemblance to those which 
the French Crown raised in Paris. But they were not sufficient for the 
financial needs of the Crown. Especially in 1640, after the conflict with 
Parliament had begun and he had against their wishes decided on the 
Scottish war, his financial position was so gloomy that he was com- 
pelled to embark in the sort of business that only half bankrupt mer- 
chants do. He bought 2,310 sacks of pepper from the East India Com- 

1 Nares, Memoirs of BurgJdey, II, 64. 

* Green, Calendar of State Papers, 1547-80, p. 531 F.; 1581-90, pp. 471, 554, 
576 ff., 580, 585 etc.; 1598-1 601, p. 538 ff. Of. Joumaal van An th. Dwycked. Mulder, 
HI, 23; Barozzi e Berchet, Bdaz. d. ambasc. venet., ser. IV, vol. I, p. 106. 

1 Very various figures are given for the Floating Debt. Cf. Parliam. Debates, 1610 
(Camden Soo.), introd. ix, xv; 1626, p. 102, Calendar of State P avert, 1619-23, 
p. 110; Ranke, Engl. QesMchte, II, 194 3.; Sinclair, H, 42. 

pany on long credit for 63,283 and sold them at once for 50,626 cash. 
This cost him nearly 17 per cent, in interest. He seized for 120,000 
silver which had been delivered by Spanish and other merchants at the 
mint to be coined, and, to the annoyance of the owners, retained one- 
third as a compulsory loan which later was duly repaid with interest. 
The King also tried, but without success, to obtain money in Spain, 
France, and Genoa. On the other hand, Harrison, a tax farmer, ad- 
vanced him 50,000 at 8 per cent., which was then the usual rate. 1 But 
when in 1642 the war broke out Parliament issued an appeal for gold 
and precious metals and promised 8 per cent, interest. There was a 
threat of punishment for non-compliance, so that it was a kind of com- 
pulsory loan. In fact, although the King naturally forbade it, large sums, 
nominally several millions, of gold and precious metals came out of the 
whole country. On that the Bong turned to the Universities, which had 
remained faithful to him, and got from them equally large quantities of 
money and gold and silver plate, although Parliament tried to prevent 
it. During the Revolution recourse was several times had to such 

Cromwell too could not dispense with floating loans. In his time it 
was the goldsmiths, who already had been bankers for decades and now 
were the bankers of the Government, who regularly granted advances on 
the revenues. 8 In this way these first professional credit brokers which 
the English have produced, obtained in the State finance an important 
position, which was enhanced under the Restoration. 

When in 1660 Charles II negotiated with General Monk about the 
restoration of the monarchy, the first step was to raise money from the 
English Royalists and in Amsterdam to cover the arrears of pay of the 
former revolutionary army and take it into his own service. To secure 
his rule Parliament granted him 1,260,000 to pay his debts. But he 
soon got involved in new ones which increased like an avalanche 
through his extravagance and the great demands of the war against 
the Dutch. The advances made by the city were totally insufficient. 
The attempt in 1665, at the outbreak of the unfortunate first war against 
Holland, to raise a loan by direct subscription was a failure. It became 
more and more often necessary to call in aid the expensive assistance of 
the goldsmiths, among whom Sir Robert Vyner was the chief financier 
of the Crown. The goldsmiths procured the money at 4-6 per cent, and 
charged the Crown 8-10 per cent. Repayment was to be made out of 

* Calendar of State Papers, dom. ser., 1640-1, p. 622; Ending, Annals of 
Courage, 1, 392; Gardiner, Fall of the Monarchy of Charles I, voL 1, 347, 377; H, 44. 

Ending, I, 396 fi.; Sinclair, I, 171. 

It is a mistake to pnt the beginning of the goldsmiths' business as bankers 
later. Malynes speaks of it in his Lex Mercatoria, 1622. Of. the pamphlet, The 
Mystery of the new-fashioned QoMsmtOu or Bankers discovered (1676). 


the taxes which had been granted as soon as the Exchequer received 
them. 1 

But soon here, too, the whole danger of the sort of finance became 
evident. In 1672, when the floating debt had grown to 1,328,526, the 
notorious 'shutting up the Exchequer' ensued. The Crown had to sus- 
pend payment. This was the first State bankruptcy of England since 
1339, and it was the last," 

Charles II did just what the Kings of France and Spain had often 
done. The bankruptcy was settled in the same way. The King had 
simply taken away from his creditors the special revenues on which they 
had a charge. In place of this he burdened the total revenues of the 
Crown with a perpetual annuity of 79,711 (interest at 6 per cent, on the 
floating debt) in favour of the creditors. That is he compulsorily re- 
duced the interest to an average rate of 6 per cent, and converted the 
floating debt into a funded debt of perpetual annuities - the first that 
England had had. 

To be sure, after 1684 this annuity was not paid, because the Crown 
had got into worse and worse straits. Its credit was destroyed, especi- 
ally since Parliament in 1681 had expressly forbidden the raising of 
floating loans on the revenues of the Crown, and even threatened with 
punishment the sale or acceptance of tallies and anticipations on these 
revenues. 3 The Crown might dissolve Parliament and at first suppress 
the Whigs politically, yet they had the capital in their hands. They 
could not prevent the Crown from once again stopping payment of 
interest; on the other hand, they could prevent new loans being 
authorized, and the age of compulsory loans was long past. 

In one of its main points Gresham's financial programme had been 
carried out. The nationalization of the money capital available for the 
objects of the State had been permanently attained; but not under 
economy and honourable dealing. 

England's development in financial policy had not prospered better 
than that of France. If we reflect that at the time when England went 
bankrupt, France, thanks to Colbert's activities, enjoyed good credit, 
and farther that it was out of that bankruptcy that there was the be- 
ginnings of a funded debt, which France had already had for 150 years, 
we come to the conclusion that France was at a higher stage of financial 
development than England. It was the Revolution of 1688 which 
brought about the decisive change. But before we occupy ourselves with 

1 Calendar of State Popart, dom. 1660-1, p. 69; 1664-6, p. 43 ff., 73; 1667, 
pp. 266, 288, 319, 371, etc.; Ranke, Engl. Getckichte, IV, 282. Calendar, 1667, 
p. 204. 

Sinclair, I, 195; II, 44 ft. 

Chandler, Debvtee.U, 97. 

that we must turn to the country which exhibits the highest point of 
development in the seventeenth century. 

The Netherlands. If we wish to pay due admiration to the eighty 
years' fight for freedom of the little Netherlands against Spain, a world 
power, we must not forget that a good part of it belongs to the State 
credit of the Netherlands. AJ1 honour to the steadfastness of the people 
and the genius of the House of Orange; but these alone had not sufficed 
to attain victory. Here, more than anywhere else, pecunia nervus betti. 
The Dutch navy at first brought in more money than it cost; but the 
war on land had to be conducted with mercenaries, and to equip and 
maintain them the Dutch could no more get on without credit than the 
Spaniards. 1 Scarcely had the final peace with Spain been concluded, 
when the costly naval wars against England and then the desperate 
struggle against Louis XIV followed on. This caused the Dutch national 
debt to increase more and more; and although it is not possible to 
reconcile the very different accounts of its size, yet there is no doubt that 
in proportion to the population it was sufficiently large. Nevertheless 
during 1640-55 they succeeded in reducing the rate of interest on the 
funded debt from 6$ to 4 per cent.; and even at the worse times, when 
the existence of the Republic hung on a hair, as in 1585 and 1672, it was 
ultimately possible to borrow the money necessary to defend the coun- 
try. The Republic had always kept faith with its creditors, which could 
not be said of any of its mighty enemies. In 1672, when the French had 
conquered the greater part of the country, it is plain that without its 
credit the Republic would have been lost. For the breaking of the dams 
-a desperate expedient -could only bring momentary deliverance. It 
was the agreement for subsidies with the Emperor, the Elector of 
Brandenburg, etc., that secured the permanent existence of the 

What made it possible for the Netherlands to do this? The short 
answer is -by means of those facts which in the introduction we 
adduced as the foundations of the credit of the medieval cities. The 
Republic of the United Netherlands was pre-eminently an association 
of towns. Its credit in the first place rested on that of the individual 
provinces, and this again on that of the towns. Every town and every 
province formed a corporation whose members the burghers were 
associated together for their benefit, even if they were no longer (like 
the burghers of earlier times) liable both in their persons and their goods 
as sureties for the debts of the community. 

Further, the Netherlands was a mercantile State. From the beginning 

1 Material for the economic history of the United Netherlands is very scanty 
till the eighteenth century. Of. the newspaper -De Koopman,' IH (1771), 169 ff., 
and a still shorter account by Weereringh, Qeachied. d. Staattschuldm (1865). 


its burghers were on the average very rich, and thanks to their spirit of 
enterprise and times being favourable, they quickly acquired new great 
riches far in excess of the capital wanted for their undertakings. 1 
Hence as a rule in the Netherlands there was much more capital seek- 
ing investment than trustworthy people willing to borrow it; but their 
native town and their native country unquestionably belonged to this 

In 1620 a Venetian ambassador reports: 'The province of Holland 
alone has a debt of 40 million gulden, on which it pays 6 per cent, 
interest. They could easily pay it off if they raised the taxes, but the 
creditors do not want this. I hear that the merchants, especially in 
Amsterdam, have so much liquid capital that the State can always 
borrow as much as it wants from them.' The report of Sir William 
Temple, who knew the Netherlands well, half a century Liter on the 
usefulness of the rentiers for the Republic is well known. Among this 
class, above all, were the regents of the States, the provinces and the 
towns. Their interests were therefore very permanently united with 
that of the common weal, for which they devoted not only their capital, 
but also their intelligence and power of work. There were then scarcely 
any idlers among the Netherlands rentiers. Investment in home securi- 
ties was then so popular that it was often considered a favour to be 
allowed to invest in them; and repayment was a source of regret and 
even called forth tearful remonstrances from the creditors, because in 
no other place could the money be put out so quickly and safely. 2 
About the same time the Dutch Mercury stated that in the province of 
Holland alone there were 65,500 who had or were able to invest money 
in annuities. It is just this large number of would-be investors that is 
the most powerful force with which we have to do here. For once this 
had made it possible for the Netherlands, not only to borrow in their 
own country, but also to purchase foreign assistance. This made it 
possible to treat the State debt from the beginning as a funded one, to 
employ the old plan of the sale of annuities, and in this way to ensure 
that the creditors had no right of calling in as well as the low rate of 

Two other circumstances made this the easier. One was the old habit 
of the Dutch to make provision for their old age by buying life annui- 
ties and perpetual annuities as a provision for their widows and sur- 
viving children; this tendency, which later degenerated into a propensity 
to do as little work as possible and live on unearned income, which in its 

' Guicciardini, Ducritt. d. PaeaiBasri (1666). Van der Ghys, GescMed. d. SticMng 
v.d. Vereaugdeo 0. J.Compagnie, 1867. Journ. v, Anth. Duyck ed. Mulder, m, 296. 

* Observations u-po^i the United Provinces, French edn. v. 1674, p. 211 8., 327 ff. 
Cf. Laspeyres, Geschichte d. vdkaw. Anochauungen d. Niederlander, p. 216 S. 

turn produced new consequences of far-reaching importance. 1 The 
other, which favoured the development of the funded debt, was on the 
part of the borrowing State. Its need for capital differed from that 
of other States. It only comparatively seldom was called forth by a 
sudden transitory deficit, but chiefly by the long-drawn-out strife for 
the freedom of their country. What in the main caused the incessant 
need of credit for the Spanish Crown - the great distance of the country 
where specie money was needed from that where it was at their disposal - 
did not come into the consideration of the Netherlands. Here both lay 
close together. The financial administration also worked much more 
quickly. So it was only comparatively seldom that the Government had 
to obtain large floating loans, and naturally so far as possible avoided a 
financial expedient, by using which their enemies bled to death. 

Certainly since 1672, in addition to the long period or perpetual 
annuities, obligations for a shorter period - usually a few years - were 
more or less frequently issued. But this was not a proper floating debt, 
of the kind we have come to know in France, Spain, and England; this 
is clearly shown by the fact that the rate of interest was often the same 
as that of the annuities. But it was a floating debt when borrowed on 
the Bourse at J per cent, per month, or when the Treasurer in the old 
manner obtained money on his own responsibility to cover up a temp- 
orary deficit in the Exchequer; but the country was not liable for this. * 

In general, not only did the financial officials preserve a great deal of 
their half -mediaeval character, but also for a considerable period there 
were many elements in the methods of the financial administration 
which were scarcely compatible with the character of a modern State. 
Thus, in spite of many complaints and several popular risings, farming 
the taxes was not abolished till about the middle of the eighteenth cen- 
tury, while the traffic in offices was little in vogue. 8 

But the former peculiar complication of the public credit of the 
Netherlands lasted on. There were debts of the State on its own account 
and on account of individual provinces, and, vice versa, debts of the pro- 
vinces on their own account and on account of the State, and in addi- 
tion debts of the separate towns, many of which equally served to pro- 
vide the needs of the State. The debts of the State and the provinces 
were again subdivided territorially according to the 'Comptoiren' where 
they were taken up. For - and this is again a quite modern feature - 
as a rule the loans were not issued through 'Negociatie,' but advertised, 
and it was left to those who wished to invest to subscribe directly at the 

Cf. Laspeyres, p. 248 ff., 254 ft. 

> 'De Koopman,' ILL, 178; Or. Place. Boeck, 1, 1606. Grossman, Die 
Borse vor 200 Jahren, Haag, 1876. 
Laspeyres, pp. 231 and 238. 


'Comptoiren' of the State. This was always the case with the regular 
annuities, but particularly in later times the borrowing on bonds was 
often arranged by negotiation with wealthy brokers. But they had 
nothing like the same importance in public finance as the contemporary 
financiers in Spain, France, and England. 

The motley picture of the public debt was reinforced by the many 
kinds of annuities (life annuities, annuities for 30 or 32 years, etc.), 
bonds and lottery loans. On the other hand, that fatal splitting up 
which persistently underlay the borrowing of foreign States, because 
most of the loans were charged on definite services, is almost com- 
pletely absent. Even in situations of danger and need it was only neces- 
sary for State, provinces or town to pledge their 'Corpus.' Confidence in 
their capacity to pay only faltered in certain specially critical moments 
and then was always soon restored. Confidence in the honesty of their 
financial administration also remained unshaken, at any rate during the 
flourishing time of the Netherlands. In the eighteenth century, how- 
ever, this was not so. As soon as the hated farming of the taxes was 
abolished, there was general complaints that the financial administra- 
tion was dishonest and corrupt. The chief cause was, unquestionably, 
the secrecy which surrounded all the methods of public finance. To 
the end the Republic had never published its budget, nor had the pro- 
vinces and towns published theirs. The amount of the debt could as a 
rule only be guessed at. The anonymous writer who refers to this in the 
newspaper De Koopman (1771) compares with it the publicity of the 
affairs of the English debt and observes ironically: 'The British will 
know too much, their statesmen say too much, and display what they 
know in all the public gazettes.' 1 

But in spite of this deficiency the management of the debt of the 
Netherlands in the seventeenth century approximates most closely to 
that of the modern State. It forms the most important link between 
the national modem State and the city States of the Middle Ages. 

The Netherlands were the first European State for which the financial 
magnates had no longer the importance characteristic of the 'Age of 
the Fugger.' This development did not depend only on the character 
of the State, but also prevented the development of Amsterdam into a 
money market of world importance. "We shall later have to go into 
details of this side of the development. 

England in the Eighteenth Century. Although since the reign of Eliza- 
beth there had been a remarkable increase in the prosperity of the 
English people, when the Stuarts were finally expelled the finances of 

igome facts were published even in the Netherlands. Cf. Rapporten ende 
Memorien over de finantien van Holland: der Extract nit het Register der secreete 
utien, van de Heeren Stouten van Holland en Westvriesland, 25 Nov., 1678. 

England were in the most deplorable condition. The Stuarts were not 
merely bad managers, but by their thoughtless absolutism they forfeited 
the willingness of the English people to make sacrifices which was readily 
forthcoming after the Restoration. 1 

We already know how bad was the situation of the finances of the 
English Crown, especially since the bankruptcy of 1672. After the 
revolution their position was in no way better, but worse than ever. 
For while the expenses increased enormously as a result of the war with 
Prance, Parliament, which had just succeeded in getting financial con- 
trol, showed itself, under the influence of long and bitter experience, 
niggardly in its grants. It took some time before the English decided 
to make the necessary sacrifice to protect its national interests. When 
at last the grants flowed more copiously, the demand increased still 
more and compelled the nation to shift a great part of it on to posterity. 
The eighteenth century, which elevated England to a world power, also 
imposed on it the most gigantic national debt in the world. Only by 
its credit was it possible for England to become a world power. But the 
new English debt was essentially different from those of the older world 

At the outbreak of the revolution England had no funded debt, except 
the floating debt compulsorily funded after the bankruptcy of 1672, on 
which the interest, however, was not paid. No change was made in the 
first years after the revolution. Meanwhile floating debts of the old 
land were contracted. Parliament went back to its old practice of insert- 
ing a 'borrowing clause' in its grants. On the strength of these grants 
the Exchequer gave tallies and the interest on these, and if possible 
the capital was paid back out of the supplies granted. The main money- 
lenders after, as they had been before, the revolution were the gold- 
smiths, by now mostly already called 'bankers.' They paid up to 6 per 
cent, interest, the legal puttrinmnn on the deposits piling up with them 
in increasing amounts, while the Government had to pay them up to 
10 and 12 per cent. Further tallies were given to the purveyors of the 
Government in payment. Since, however, the revenues out of which 
the interest and redemption money should come were often paid only 
very incompletely, and often did not amount to so much as the tallies 
charged on them, and since, further, on account of the novelty and un- 
certainty of the political situation capital for the most part kept away 
from Government loans, the creditors of the Crown, when they wished 
to dispose of their tallies, often lost 20-30 per cent.* 

* Macaulay, History of England (IV, 319), and Sinclair (History of ike jnMic 
revenue of the British Empire, H, 12 ff., 57) are very inadequate as to the origin of 
the English Public Debt. See G. Cohn, Finannmssenechaft, p. 683. 

Locke, Consequences of the Loweringof lnterest(1681); Child, New Discourse on 
Trade (1692); Godfrey, Short Account of &e Bank of England (1695). 


This was still a method of finance at a lower stage oi development than 
that of France at the time. But now there came a fundamental change. 

The first decisive step towards financial reform was the introduction 
of the 'funding system' after 1693. Bolingbroke asserted later that it 
was occasioned by the wish of the aristocracy, who had attained to 
power, to interest as many people as possible together with their pro- 
perty in the new regime. 1 It is possible that this had had something to 
do in the motive again reappearing in the history of finance, but un- 
questionably the financial need combined with the new Government 
was decisive. When the way was once found, the need of the English 
people for capital (or for investing their capital) followed on. 

Macaulay has expressed surprise that England was so late in follow- 
ing the example of France and the Netherlands in the matter of funded 
loans. This surprise only again shows how difficult it is for great 
historians to judge simple economic events. A funded debt could not be 
formed so long as the King and Parliament were fighting for the mas- 
tery. It was only after the revolution that the English State became 
what the Dutch Republic had long been -a real corporation of in- 
dividuals firmly associated together, a permanent organism. It was 
only after this that a proper national credit could develop in England, 
as, on the other hand, in France it was due to the fact that the mere 
word of the monarch could make his subjects liable for his debts. But 
there was this important difference between the national credit of 
England and that of France and the United Netherlands - it was 
public. England was the first country to introduce this great funda- 
mental principle; as we have seen, its importance was early recognized 
in the Netherlands. To form a correct estimate of it we have only 
to think of the uninterrupted disappointments which, if business is 
secret, must necessarily be the fate of every attempt to find out the 
financial position of the State. A financial system such as has since 
that time developed in England could only gain by the light of pub- 
licity, while in most other lands there must have been a well-justified 
fear of the opposite effect. 

Certainly it was a long time before the English State without great 
exertions could get funded loans of very considerable size - a sure sign 
that at first the need for an opportunity of investment cannot have 
played an important part in the whole development. But then it went 
so much the fas